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Saturday, 23 July 2011

eBooks & the Sleeping Giant - India


Tiny Tech Store in Mumbai
Photo by AG Claymore




With Kobo moving into the German eBook market with their carefully built German library and soon-to-come German language reader, I have to wonder what’s next?  Germany may be the second biggest book market in the world, but the second biggest population is in India. With just under 1.2 Billion people, they run a close second to China and thirty percent of the population is urbanized. Think about that for a second. India’s urban population is bigger than the total population of the US and Canada, or the entire 17 country Euro Area. Talk about a massive market.
English enjoys the status of subsidiary official language in India. This has less to do with their colonial past than you might think. English is now the language of major parts of their economic engine. Due to their international nature, the IT and software sectors tend to work in English and they pay quite well.
Internet access is ranked at an impressive number six globally (roughly 60 million). That has them running just behind the Germans for total number of users. What the number doesn’t show us is the vast number of Internet Café users. Give it another five years and that number will grow into the hundreds of millions.
So, where is the bottleneck that’s keeping this sleeping giant from becoming the dominant market for electronic books? I believe it’s the eReaders. I see prices in the Indian market hovering around five to eighteen thousand rupees. A reader at Rs 18,000 represents 13% of per-capita GDP. If you compare to the North American Market the same reader will cost only 0.4% of per-capita GDP. This isn’t just a case of exchange rates in different economies. Comparing in dollars, the same reader is sold for at least three times the price in India. I sure wouldn’t buy an eReader if it cost more than a tenth of my income.
Pricing like that is an incentive to the strong IT sector to follow the example of the auto industry. India has a very strong automotive industry and it has gone shopping in the West. Companies like Jaguar and Land Rover now fall under the Tata brand.
 Sooner or later, (if not already) a domestic entrepreneur will launch a decently priced reader and become the first to properly serve this potentially massive market. This isn’t a slow country with tech adoption either. Once a local start-up dominates this market, they will have enough economic clout to do a little off-shore shopping of their own.
Should the current players look at partnering to develop a locally built reader? Will any of them recognize the huge potential in this market, or the risk of waiting too long?

2 comments:

  1. Stupid Amazon doesn't have a store for Indians. Neither does Apple. They have no idea how stupid it is to lose out in a booming economy like India. No wonder sites like Flipkart are preferred and trusted while Nokia and Samsung cashes in heavily in the cellphone market.

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  2. Pri, your cellphone example really hits the mark. In a very short time, cellphones have gone from the exception to the rule. That seems to be the Indian market in a nutshell; when something takes off, it really takes off.

    Now the Akash tablet is set for production in Hyderabad and there are millions of units expected by fiscal year end. It may not be the hottest of android tablets but it will replace the bulky textbooks that students have to carry and it will put an excellent research resource at their fingertips. I remember the heavy books I had to carry around while studying Biology and Engineering - I would have loved to have a tablet.

    Amazon may only be in the opening stages of setting up an Indian operation but if someone were to beat them to it and digitize the older public domain Indian literature, they could really dominate the market for electronic reading.

    Tablet makers like Apple and Samsung are already too late to make a move in this market. It's extremely unlikely that they could ever compete with the price set for the Akash, which should come down even more after a few million roll off the line.

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