Publishers are considering working together in order to streamline distribution in India, delegates at yesterday's Publishers Association were told, as the new chair of the PA's international board Peter Davison said digital publishing makes the international market "more contestable" to smaller players.
Examining the Indian market, Pan Macmillan Asia m.d. Daniel Watts, who is based in New Delhi, said the main challenge for publishers selling in India was payment collection, with distributors under pressure from retailers to provide better service, availability and prices, and retailers wanting to deal directly with publishers.
He said: "The market has also opened up and the retailers have multiple choices from where they can source their books. This has facilitated a credit culture. The retailers will take 150-210 days credit. They'll withhold payment for impending returns which are usually made within three months. They'll withhold payment as it suits them because there is always another source ready to supply books. The backlog in payments goes all the way up the chain. Most publishers operating in India are not able to collect inside 210 days and they face the same challenges with regards withheld payments for pending returns."
He said there were ongoing talks between the major publishers operating in India, including HarperCollins and Pan Macmillan, over whether to work together through a central warehouse to supply retailers directly, a move which may be a possibility within the next "two to three years".
He estimated that the online bookselling market, led by Flipkart.com, currently has a 15% share of the market, with physical book chain Crossword c.o.o. Kinjal Shah telling him that his board of directors no longer have the confidence to open new stores.
Watts said: "This [digital] sector is growing very dynamically . . . Some think the retail space is growing faster than the retail trade. The chain stores are suffering at the hands of the onliners." However, he also reported that Indians are likely to adapt to e-reading quickly, suggesting online physical bookselling may suffer if the population quickly switches to digital books.
Speaking to The Bookseller ahead of the day's conference, Peter Davison, director of corporate affairs at Cambridge University Press and new chair of the PA's international board, predicted a 20-30% growth per year in emerging medium-income markets such as the BRICs [Brazil, Russia, India, China], as well as Saudi Arabia and Turkey, over the next five years, but said: "It remains to be seen how much of the consumption will be paid, as lots of services are available free, the price of a lot of media products is coming down, and of course many of those markets face great threats in the form of piracy."
He also said digital publishing makes "parts of the global market more contestable to smaller players", as it requires not such a complex infrastructure, but added: "Bigger publishers do still have the ability to get inside the heads of local readers, and to be a Penguin or a Random House for India, rather than for the UK. The ability to become truly local in dozens of markets is pretty ingrained in a lot of us."
Publishers also reiterated calls for better information on the global digital market at the PA's International Conference as Nielsen announced that US retailer Walmart is to join its BookScan panel in the US. Ann Betts, Nielsen Book commercial director, said the move will mean its US charts will provide a fuller picture of book sales.
Speaking as part of the "Changing Face of Export Sales" panel, Helen Kogan, m.d. of business-specialist indie Kogan Page said 50% of its business was made up of export sales, but said: "One of my biggest bugbears is about the nightmare of digital reporting, it should be a simplistic supply chain but instead we are dealing with multiple reports, multiple spreadsheets. Reporting is a real issue and distributors have a part to play in this. They could support us."
On the same panel, Macmillan international development director Jonathan Atkins said investment was likely to be on local publishing and marketing. He said: "In the international market, the trade has been working with wholesalers. What that means is that we are two steps removed from the consumer, and I think that we need to think more about the consumer, we need to understand much better who that customer is, and that is where online is important—you are even closer to the consumer as you are seeing feedback."
The day's keynote speaker, Bill Russell of the UK Intellectual Property Office, called for input from publishers about the role of its IP Attaches, with the first having started work in Beijing this week. Russell invited publishers' advice about what steps they would like to see the attaches taking, and which territories they would be most valuable in. He said: "The attaches' roles are very much evolving. Their role will depend on how people there use them. My plea is to use the attaches in a helpful, constructive way," also urging publishers to get IP systems and protection in place "way before" going into other markets.