For Sharmishta Dutta Roy, going to South City Mall in Calcutta on Saturday evenings means just one thing — a chance to browse for books at the Starmark store. “While my family takes care of household essentials, I leaf through the latest books and end up buying one or two,” says the 36-year-old linguist.
Roy is online through the day, either on her desktop computer or her android phone. But ordering a book online has never crossed her mind. “Many of my friends do so, but I am a different animal altogether,” she chuckles. “I always want to read a few pages from a book and feel it before I buy it.”
At a time when more and more people are shopping online for books, customers such as Roy are worth their weight in gold for brick-and-mortar bookstores reeling under the pressure of mushrooming online bookselling sites.
“This is the biggest crisis we’ve faced in our 50 years of business,” says Anuj Bahri of Bahri Sons in Delhi’s upscale Khan Market. “Although it’s a nascent business as compared to that in the West, we are already seeing the difference with falling footfalls. I fear a major problem a few years down the line.”
According to Technopak Advisors, a management consulting firm, the Indian book publishing industry is valued at Rs 10,000 crore, out of which the sales of non-academic books are estimated at Rs 2,000 crore. It is this section that appeals to online buyers. “The online players are estimated to be selling books worth Rs 400 crore. Online retailing will grow at a higher rate in the years to come. In percentage terms, this market will gain over brick-and-mortar book retailers,” predicts Pragya Singh, associate director (retail), Technopak Advisors.
Online companies such as Flipkart, Infibeam, HomeShop18, Dial-a-Book, Bookadda, Friends of Books and uRead offer a large number of titles at great discounts. Customers get their books at their doorstep and have the option to pay on delivery.
“We have a lean cost model, along with low overheads (owing to bulk purchases and lower real estate expenses) and this allows us to pass on some of these margins as discounts,” says Ravi Vora, vice-president (marketing), Flipkart.
Take the case of the bestselling Breakout Nations: In Pursuit of the Next Economic Miracles by Ruchir Sharma. While Flipkart offers it for Rs 401 — 33 per cent less than the original price of Rs 599 — a bit of haggling at traditional bookstores will lead to a discount of only 10 per cent or so.
Bahri smells a secret pact between the publishers and online companies. “It is impossible for online companies to offer such discounts — sometimes 40 per cent — without the publishers being on board,” he says.
Publishers beg to differ. “Bookstores should look within rather than blaming everyone else,” says Nagaraj Krishnan, product head, Penguin India, which currently sells 25 per cent of its books online. Krishnan says almost every wholesale buyer gets a margin of around 40 per cent on the cover price of a book from its publisher. “They decide how much they want to offer their customers,” he says.
It is not just the cost of a book that gives e-retailers an edge over the others. “The number of titles available online is much larger than that in a brick-and-mortar store,” says Vora of Flipkart, which has 11.5 million titles on offer — a figure that no book store can match.
Traditional bookstores, clearly, are at a disadvantage. The space they occupy — mostly in upmarket areas — is expensive. Space constraints also mean not every book can be displayed. “But online retailers would have huge godowns on the outskirts of a city for which they’d pay peanuts,” says Bahri.
That’s why Rajeev Shukla, a small publisher of translated books, prefers to sell his books online. Booksellers “dump” his books in dark corners, he says. E-retailers, on the other hand, give him a chance to compete with the big boys of the publishing league, something he couldn’t do all these years. “Online is a level playing field,” Shukla says.
The future of online bookstores looks rosy, but market watchers warn that the discount gravy train can run out of steam. “Some online retailers are discounting below cost price to attract customers,” says Technopak’s Singh.
This won’t work in the long term when online sellers look at profit and gain. Krishnan points out that Amazon, the world’s largest online retailing company, took years to break even. “I don’t think many Indian retailers are even thinking about breaking even. Everybody associated with the industry expects a shakeout with only those with a good business model surviving in the end.”
Traditional bookstores realise they have to compete with the best of online stores. Some are trying to beat the new challengers at their own game. Crossword has ramped up its online portal and is trying to move away from its store-in-a-mall format to corner or express stores in catchment areas. Several other bookstores such as Om Book Shop, Landmark and Bahri Sons have gone online to lure customers with discounts.
Of course, traditional bookstores, with shelves spilling over with colourful books, wield their own charm. As Vikram Marett of Shevik’s, a toy and book store in Delhi, puts it, such stores help readers discover books they know little about.
“Books that are publicised do well online. But you miss out on gems which are very good but are not well known,” says Marett, citing the example of Taschen 4 Cities guide sets that flew off the shelves in his store, even though each set cost overRs 3,000.
Some bookstores too offer discounts. “Many titles in Crossword would be cheaper than those online,” says Siddharth Pansari, managing director, Crossword, Calcutta.
Pansari is confident that traditional bookstores will continue to hold the fort when it comes to reference books, children’s books, cookery and other categories not popular online. “There’s potential for both to exist; both will have to work on their strengths,” he says.