Amazon and eBooks in India
This post was originally written on June 11, 2014. It is an interesting read as I have not updated this post at all as it shows just how Amazon.in has grown since 2014.
New players have entered the Indian eBook market while many traditional publishers have tried to stake their claim in this huge growing market.
It was not too long ago that I published an article on the massive potential and future of eBooks in India.
I spoke about how the big publishers and service providers can win a share of this very lucrative market. At the forefront is Amazon who has been strategically marking its territory for several years now. The question is; ‘will Amazon dominate the Indian market or will another company jump in and surprise us all?’
Initially, Amazon entered the Indian market via its Junglee.com comparison shopping site. It has now been over a year that Amazon.in has been fast-tracking its growth as it strives to dominate the online retail space in India.
The question is, with such poor infrastructure still existing in India, how does Amazon plan to get all of the products customers buy online to their front door? Also, how does the Amazon.in business model differ to those stores in the U.S, U.K or Australia?
India and Foreign Investment
Amazon is also banking on more favourable policies towards foreign investment. Amazon India’s Vice President, Amit Agarwal, has publically commented on Amazon’s plans to enter new categories.
Amazon launched its ‘marketplace model’ in mid-2013 with a focus on books and movies. Today, the Amazon marketplace has nearly 6,000 sellers. Once the ‘rules of engagement’ change and foreign companies can operate with greater freedom then we will see an explosion in the growth of online retail and investment in India and the Indian economy overall.
The ‘customer centric’ approach being pushed by Amazon is what has helped it to take control of the fast growing mobile commerce business. The Indian population is a nation that uses mobile devices to connect with the internet. This traffic will only increase as more Indians become connected to the internet.
Amazon’s goal is to be the world’s most ‘customer-centric’ company and enable customers to find, discover, and buy anything online. They have achieved this goal in many countries but India is a huge opportunity that they have yet to conquer.
Amazon’s Approach to Solving a Logistics Nightmare in India
Getting people in India to buy online is the first step. The biggest problem lies with the logistical nightmare that is presented to Amazon in the way of poor infrastructure and postal services to all regions.
To cope with this, Amazon has partnered with external carrier partners such as FedEx, IndiaPost, Blue Dart and Gati to ensure that deliveries reach all corners of India.
India currently has two fulfilment centres in Mumbai and Bangalore which have the capacity to stock and store millions of products. This is a great start for the shipment of physical products.
One of the greatest advantages eBooks have over books is that there is now warehousing or storage required. eBooks are delivered over the internet which is why there is such a massive opportunity for other companies besides Amazon to succeed in India.
You do not require fulfilment centres or the setting-up of partnerships with postal services. In fact, such digital stores can operate outside the borders of India.
What About eBooks?
Selling a digital product removes a lot of these logistical problems so how will Amazon control this market? Most likely the same way they have succeeded in other countries by controlling the authors and the contracts with publishers. If you are an author or publisher and you want to succeed then you will have to play ball with Amazon.
Where Will Amazon’s Competition Come From?
Amazon is renowned for flexing its muscles when it comes to competition. Quite often they will buy out any threat to eliminate such competition. But who will challenge Amazon in the race to control the lucrative eBook market? Will it be a major publisher or a new up-start?
Only time will tell. Here are few that could steal Amazon’s thunder:
1. Penguin Random House – if they can sell direct to customer
2. HarperCollins India – if they can sell direct to customer
3. Media International – if they can leverage their large portfolio of Indian eBook domains
4. FlipKart – if they can maintain their popularity with online shoppers
5. Smashwords – if they can continue to get their eBooks into the stores that sell to the Indian market
…. and a few more others not listed.
Where Do I See the eBook Market in India in 5 years from Now?
Based on the continual growth of the past five years I can only envision a huge opportunity for authors, service providers, online retailers and investors to capitalise on a billion plus population that is connected to the internet and who are changing their attitudes to buying online.
The turning point will be allowing foreign investment to enter the market. Removing the barriers to entry will set-fourth an explosive growth in the uptake of eBooks.
What Will Remain the Same Regardless of Who Wins the Battle?
• The same model for selling eBooks will India will exists as with other countries on several levels.
• Authors will still be required to engage, connect and build a relationship with their audience. Authors will still be required to make sure they get their name in front of their audience.
• Online eBook stores will need to do more than just sell eBooks
• The model will move towards ‘direct-to-customer’ sales
• Readers will buy eBooks from author websites, blogs, community sites and sites that target their specific category
The main challengers to Amazon will be those who own the IP such as the eBook domain names, websites, blogs, communities and stores that target specific categories and can build a large following of readers within that category.
eBook Distributor Smashwords has already entered the Indian market and has partnered with India’s online store FlipKart to sell eBooks from independent authors. They are one example of a provider banking on Amazon’s competitors doing well.
The race will also be on to capture the author market, in particular those who self-publish. At this stage I imagine Amazon will be in line to succeed here with an online portal such as their current Amazon KDP portal which allows all authors to upload and sell their eBooks from Amazon. The potential for millions of Indians to get into writing and self-publishing eBooks is huge.