Indian book retail industry goes online; book e-tailing to take off

By siliconindia   |   Wednesday, 04 August 2010, 22:09 IST   |    2 Comments
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Bangalore: According to a Technopack Advisors report of 2008, the Indian book market is valued at around $2.6 billion and less than one percent of India's $2 billion book industry comes from the online segment. Hence, the internet has a good potential for India's book retail industry. On the releasing day of Dan Brown's novel "The Lost Symbol, in September 2009, Flipkart.com, an Indian online book retailer, sold over 2,000 copies. According to Sachin Bansal, Co-Founder and CEO of Flipkart, the company did well because its main focus was to meet consumer expectations. Flipkart, which was started in 2007 with initial costs of $9,000 and 50,000 titles, made over $4 million in revenue last year. Earlier this year, it raised $8-10 million from New York-based venture capital fund Tiger Global Management. Flipkart isn't the only player in India's online bookstore arena who is hopeful in this regard. Infibeam, a Gujarat-based online book retailer, has also recorded $20 million revenue target for the year. The list also includes Firstandsecond, Librarywala and Tradusbooks among others who are hopeful of getting a foothold in the market. Online book retailing has some key advantages like potentially infinite shelf space, no real estate costs, an absence of the personnel and infrastructure expenses involved with running a physical store, lower prices and no inter-state taxes. Adding to it, there is easy scalability, which is the best part of it. However, there are some problems too. According to Mahendra Swarup, President, Indian Venture Capital Association, The market should have a level of maturity before e-tailing and e-commerce can take off. The reason behind Swarup's remark may be India's relatively low levels of Internet penetration. According to an I-Cube (Internet in India) study conducted annually by IMRB International and the Internet and Mobile Association of India (IAMAI), India had 52 million active Internet users as of September 2009. But only 10 percent of those users indulge in e-commerce. While most online vendors stock regional language books, those titles usually account for less than one percent of a total stock that averages 6-7 million. But according to observers, more than regional language books, Indian websites are most lacking in user interface and service. Emerging vendors like Infibeam's Mehta and Flipkart's Bansal, realize the importance of customer service; both implemented a "no-questions-asked" return policy on their sites and plan on including user history, reviews and recommendations in the near future. According to some analysts, Indian consumers are more secure transacting with a retailer who is present in both formats; a clicks-and-bricks hybrid model -- in which the business has both a physical and virtual presence. Indian bookstore chain Crosswords, for instance, is set to launch its online store in three months. A physical store, a known model, would make it easier to ride the online learning curve.