Bookstores: huge biz opportunity

A passionate writer, my friend, recently penned and released her new book. Eager to grab the first copy, I went around hunting for a bookstore in the neighbourhood of the town I live in. To my surprise, I could not find a single bookstore in the entire vicinity.

The large chunk of the bookstore retailing in India is still largely unorganised. Growth of organised bookstore retailing, therefore, is yet to be seen. However, number of avid readers and demand for organised bookstores as well are huge. As Gurpreet S. Randhawa, Principal Consultant, KSA Technopak Advisors Ltd, says, “There has been minimal growth in the industry per se (sub 10 per cent), but, with the introduction of new organised stores, book reading for sure will catch up with more people finding these stores agreeable to their taste.” Book reading can be further increased by opening bookstores, which have the right ambience, culture and set-up for book reading. K. Dasaratharaman, President - Speciality Retail Business, Books and Beyond, Spencers Retail Ltd, says, “Like all other organised retail formats, there is value that is being offered to the consumer and which is being appreciated - be it range, ambience, convenience, value additions or any other. If this trend continues, organised retail in books will grow.” Devangshu Dutta, Chief Executive, Third Eyesight, believes, “The growth is across genres, be it fiction or non-fiction. The increased availability and growth of modern channels (speciality book stores, combined book and music stores, book sections in department stores as well as book sections in hypermarkets) are mutually reinforcing factors.” Giving his opinion, Sandeep Dutt, CEO, EBD Book Café Pvt. Ltd, says, “There is growth in the volume of book trade as India is exporting today. India exports more than Rs 5 crore worth books and 10 per cent of the business in India is export today.” Commenting on the growing aspect, Rajiv Chowdhury, CEO, Oxford Bookstore Pvt. Ltd, says, “Changing demographics, changing customer profiles, changing aspiration levels, availability of worldwide publishing etc. are some of the factors, which are contributing to the growth of bookstores.” Enumerating reasons behind the growth of bookstore retailing in India, Preeti Vyas, Business Head, Depot, Future Group, says, “As people move up in life, their consumption patterns shift from ‘needs’ of life to more ‘wants’. Books fall into the ‘wants’ space as they enrich your life and play an important role in your ability to improve your quality and experience of life. As incomes keep growing and organised retail keeps growing too, the bookstore industry is sure to see double digit growth in India.”

Target: location

Bookstore retailing is a profitable business. Finding the right location at affordable rent is one of the keys to success in this business. Can there be any ‘particular (ideal) location’ for bookstores? Answering this question, Mr Randhawa says, “The ideal location will be there where the audience is located - be in malls or high streets.”

To open a bookstore, companies have set procedures for the selection of location. Crossword official spokesperson says, “The business development team has their own set of research-points, which they observe before finalising the location. Catchment plays an important role and deserves due attention before finalising the store. High streets and malls are always preferred as footfalls in such locations do tend to get additional walk-ins to the bookstore.” Commenting on location, Mr Chowdhury says, “Location is a very important criterion for retail activity. We look into aspects like visibility of the store, accessibility, parking and frontage. We decide between malls or high streets depending upon the relative merit of each location.” Adding to this point, Ms Vyas says, “We prefer malls to high streets as we believe that malls are the new public spaces for Indian consumers. The mall, as an entertainment and leisure destination, is the place where consumers love to go. For high walk-ins are already in the mall, if the store offers a good experience and correct assortment of merchandise, success is assured.”

Promotional strategies

Now, once the bookstore is opened, customers start walking in. But, to retain those customers and invite new ones, bookstores need to offer a balanced variety of books suiting the tastes of wide-ranging readers. What enables bookstores to maintain themselves and keep on increasing footfalls? What are the strategies being followed to let footfalls remain intact and improve year-on-year? Referring to promotional strategies, Crossword official says, “Crossword has been able to increase its footfall due to two primary reasons - the thematic and tactical promotions and the round the year events held at the bookstore. Promotions have the objective of giving a different set of offerings to customers every time they come to the store. Research carried out by Crossword indicates that most of the customers come back to the store at the periodicity of sixty days. So, promotions are planned keeping this periodicity in mind. Events are planned keeping the following objectives in mind: providing value-added service to our customers, becoming community centre for authors and poets and garnering public relations through events, which act as a reminder medium for our customers. All these do help us in getting the increased footfalls and sales.” Commenting on strategies, Mr Dasaratharaman says, “Keeping footfalls improving is a function of activities that are done outside the store in the catchment area in conjunction with what is done within the store. Catchment area activities include local media and reaching out to consumers. Activities within the store include correct merchandising and visual merchandising, proper consumer service and value offers to consumers, which come in many forms from value bundling, book reading sessions to author visits and signing sessions. It is important to assess what value offer will have the best impact and at what time.” Reflecting on the ways for increasing footfalls, Ms Vyas says, “Through creation of continuous opportunities for customer engagement - either through interesting offers, promotions and celebration of new titles or mega launches accompanied by a meet-the-author event, like the one we recently did with Chetan Bhagat. These and other initiatives like our recently launched publishing-on-demand service, Depot Self Publishing, keep customers coming back and help us grow the market too.”

Coffee and books

CCD or Barista-like coffee cafés are referred to as meeting points rather than as reading centres. Commenting on shop-in-shop bookstores inside café houses, Mr Dutta says, “Combining coffee with books is something that successfully happened in the US, and the driver of the two was bookstore. rather than the coffee chain. The market dynamics in India for these two product categories are significantly different from each other. A cafe is a place for meeting and interacting with others, while a bookstore is geared, among others, to individual browsing.” Contrary to this, Mr Randhawa has a different opinion and he says, “This is a western concept where readers are lured to sit down in a café and read books. This way, it gives a reader a space to enjoy books with a cup of coffee and it also adds to the revenues of the store. Hence, it is win-win deal for both the retailer and café owner.”

Online retailing

Online purchasing in Indian context is yet to be familiar with consumers. Money transactions on the websites are not considered safe and one is scared of someone misusing his account and transfers. Books are available online, yet the market for online retailing would involve a tremendous effort to make it safe and popular among consumers. Ms Vyas says, “In India, the figure is still miniscule as internet and broadband penetration is still limited. Most book lovers still prefer shopping at brick-and-mortar bookstores.”  Complementing this point, Mr Randhawa says, “Online books sale is very nascent in India. With internet penetration on the rise and websites offering secure transactions, share of online retail will go up in future.” Companies too have their websites and consumers can search their choice of books, order and get them delivered at their doorsteps. Commenting on the same, Mr Dasaratharaman says, “We do not yet have an Amazon type of online retailer in India.” According to Mr Chowdhury, “Online book retailing is still small in India but it is growing exponentially. It is estimated that around two to three per cent of customers buy online.”  And, here is what Crossword’s official spokesperson says, “We do have an online model for book buying. However, we do have a ‘dial a book’ system, which contributed six per cent of our overall sales.”

Joining hands with foreign firms

 India bags second position on A.T. Kearney's Annual Index of Most Attractive Emerging Market Retail Destinations, after already holding first position for three successive years. With such an opportunity, foreign firms are queuing up to enter the Indian retail industry and make hay as the sun is shining nice and bright. Commenting on joint ventures, Mr Dasaratharaman says, “In any tie up, both partners have to bring value to the table, which is complementary. Book retailing is a specialised area and someone with experience can add value to this segment. The attitude of Indian market and consumers to reading and buying is quite different from that of many developed markets and their consumers. Choosing the right partner will be important.”  Giving opinion on future prospects of tying up with a foreign partner, Mr Chowdhury says, “The foreign partner would bring in good systems and 'best practices' and also funding in some cases.”  As for Depot, Future Group, Ms Vyas informs, “No, we are not in talks with any foreign partners for a JV in bookstore retail although we have been approached by some international players in this space. We do have relationships with international publishers, some of whom work exclusively with us in India.”

Predicting future

One would definitely agree that books are storehouses of abundant information and knowledge and retailing of books in India will see an exponential growth in the coming years. Mr Dutta says, “As far as developing the market is concerned, I believe that books are a habit (and a good one!) that is developed very early. Indian publishers and retailers as well can encourage the growth of indigenous writing and publishing for children. I will not be overstating if I say that Indian parents are, today, hungry for inputs that can help their children expand their minds. We have a history and a very strong culture of placing literature at the top – be it philosophy, history, sciences, poetry or story-telling. This is a market that is truly waiting to explode, despite TV and the internet (or perhaps, because of these!).” So, though avid readers still have an option for running to the closest bookstore to get the book of their favourite author, one cannot, yet, underestimate the potential of the bookstore business in India.