eBook Sector in India

INTRODUCTION

• The book market in India is at the cusp of major changes. Fueled by a growing economy, a burgeoning middle
class, and higher literacy levels, the expanding book market is preparing itself for the next big curve—eBooks.
• The book market in India is estimated to be between currently worth Rs 261 billion making it the sixth largest in
the world and the second largest of the English language ones, is expected to touch Rs 739 billion by 2020.
18,000 to 19,000 publishers produce a volume of around 80,000 to 90,000 books a year. After the US and UK,
India ranks third in the world for English-language publishing.
• According to the Federation of Indian Chambers of Commerce and Industry (FICCI), the publishing industry is
growing at a rate of 30%—a trend aided by the opening up of foreign direct investment (FDI) in the publishing
industry, up by 100% from year 2000. Almost all of the multinational publishing companies have a presence in
India now, but the bulk of Indian publishers are family-owned, small-scale businesses.
• While the boom in publishing augurs well for the growing print book industry, the eBook market in India is
currently expected to be less than 21% of the total book market. Resent market study predicts that the Indian
eBook market will grow by 60 to 65 percent in the next two to three years. The education sector (K–12, higher
education, academic) was the early adopter of e-Learning and e-Content in the last decade. However, over the
last five to six years, eBooks have thrived in the academic books segment, although hardly any of them originate
in India. Almost all of the online educational content and digital books available are currently in English.
• The percentage share of the broad genres of total books published, show that nonfiction makes for 47.3%,
fiction at 31.4% and children’s books at 21.4%. More than half of all print books published are in Hindi (26%) and
English (24%), and the rest is made of books published in 22 other official languages of India.
• A few trade publishers released eBooks in 2012, which has pushed eBooks segment amounts to US$138m in
2019. Revenue is expected to show an annual growth rate (CAGR 2019-2023) of 3.5%, resulting in a market
volume of US$158m by 2023.
• Issues of piracy, plagiarism, and a lack of awareness about copyright continue to be a concern here, although
policies and legal frameworks are being put in place to address them.
• Print book penetration has been long challenged by a fragmented value chain, especially at the distribution
level, poor infrastructure, and the lack of access to and affordability of books.
• Although literacy levels in India increased by 9% in the decade of 2001–2011 (the literacy rate is 74.04% for a
population of 1.2 billion in 2011), there are acute fissures in access to digital opportunities. Of all the literate
people in India, those that are literate in the primary language of digital information, English, make up 6% of the
total population.
• The government of India is leading several initiatives to promote digital literacy and provide access to digital
content at school and college levels. National-level missions such as the Rs 4612 crore ($859 million) National
Mission on Education through ICT (NME-ICT) have been introduced. The NME-ICT is working in collaboration
with other related missions and schemes—National Knowledge Network, Scheme of ICT in Schools, National
Translation Mission, and the Vocational Education Mission.
• The country’s well-established IT software industry has made India a sought-after destination for outsourced
services. Nearly 60% of the global publishing industry’s outsourcing of business processes comes to India.
Conversion and digitization of backlist and archives top the list of services sourced.
• A spurt in the sale of e-Reader devices in 2011 and in early 2012 and the Kindle and its home-grown versions
signaled a promising trend for eBooks. However, by late 2012 it was evident that India would leapfrog from
using e-Reader devices to favoring tablets and smartphones for consuming a range of digital content, including
books. So far, most e-Reading devices and book-related apps have piggy-backed on the bulk of freely available
out-of-copyright digitized books of world classics and have been able to attract consumers to access books on a
digital device. In India, because it is a low-priced editions market, especially in the trade segment, eBooks don’t
yet compete with print books because price is not a major differentiator. The eBooks segment, the number of
users is expected to amount to 102.9m by 2023.
DEMOGRAPHICS AND READINESS

• India’s large youth population (17 – 36 years) signals a sizeable market potential for publishers. Estimated to be
600 million in, youth constitute 42% of India’s total population. Of these, 73% of youths are literate, with a
majority residing in rural areas.
• According to the National Youth Readership Survey, half of the readers surveyed gave “knowledge
enhancement” as the first reason for reading leisure books. The survey also revealed that more literate youth in
urban areas were readers.
• The current demand for eBooks is coming from the six metropolitan (Tier I) cities—Bangalore, Chennai, Delhi,
Hyderabad, Kolkata, and Mumbai. It is estimated that 15% of the Indian population has purchased an eBook
during the period of the study. The study also revealed that the typical eBook buyer in India is a college
graduate, more likely to be male in the 23 – 34 years age group, working fulltime and living in a city. This
perhaps explains another finding by the survey, that the majority of books downloaded were either from the
professional/business category or academic/textbooks.
• According to estimates, India has about 200 million children under the age of 18, and 69 million of them reside
in urban areas. Mobile devices have become an important utility for young urban parents to entertain their
children with. A growing number of parents are exposing children to apps at an early age. A study suggests 26%
of survey participants from India were downloading a phone app for their kids at least weekly.
• Indications are 73% increase in Internet-based readership between end of 2015 and first half of 2019. In the
same period, only slight growth was observed in printed newspaper readership (2.9%).
• The estimated User penetration is 5.7% in 2019 and is expected to hit 7.2% by 2023. The average revenue per
user (ARPU) currently amounts to US$1.76.
• 40% of the eBook buyer are male & remaining is 60% with them being part of the upper middle class.
• It is expected that in the year 2023 a share of 41.2% of users is 25-34 years old as the current generation will be
trickling down into that age bracket.

TECH INFRASTRUCTURE

• The ratio of computer literates in India is more that 50 % (627 million) of the population. The digital growth in
India is a result of several boost combined, namely access and affordability, good infrastructure, and social
equalities in technology.
• Internet penetration in India is estimated to be 26% at this time. The number of Internet users is 635.6 million
with 460 million active users.
• When it comes to mobile phone, the penetration level is greater in urban India. In the end of November 2019,
there were 1026.37 million subscription base connections all over India, of which 62.70% were in urban areas.
Even though low-cost feature phones accounted for 71% of total mobile handset sales, 829 million smartphones
were shipped in India by 2019 with 43% using the same for reading online content.
• It was only with the launch of Amazon’s Kindle India store in August 2012 that a Kindle device was available at
an introductory price in India when the US company partnered with the local Croma retail chain. Until then, e-
Reading devices, primarily the Kindle and perhaps a few Sony e-Readers, were imported.
• India’s preference for multifeatured devices that offer more value over and above read-only devices like an e-
Reader is perhaps the reason for the proliferation of low-cost and Android-based devices in the country.
• It is not surprising that tablets sales went 3X in the period between 2013 to 2018 from 23.3 million to 69.6
million were those priced below Rs 10,000 ($186), which is 17.4 % of the total internet user, using 73% of the
screen time for reading.

SHOPPING FOR CONTENT

• The non-academic (print) book retail market is estimated to be $37 billion in India. Online book retailers, are
selling books worth $ 7.4 billion by end 2018. In general, online retail in India grew at an annual rate of 63% from
2015 to 2018. Offline retail chains like Crossword and Landmark have also set up online bookstores.
 • The statistics shows that 51% of Online buyers focused on paperback, 25% on eBooks, 16% Hardback, 5% other
prints & 4% of Audiobooks.
• In the last year, publishers, especially in popular fiction and general interest categories, have seen a surge in
online sales. Major publishers have reported that 35% of its total book sales to online stores like Flipkart, and
Amazon. The online stores have also relied on selling imported titles, sourced through international distribution
agencies, to populate their catalog. This has given readers access to titles that were otherwise not easily
available in India.
• In the absence of an organized distribution system and adequate sales infrastructure, Indian-language publishers
have had to rely on vertical integration—by managing distribution and retail themselves. Though relatively new
entrants to online retail, many of them attribute 20 percent to 25 percent of their sales to Flipkart alone.
• Many private as well as Govt. players have launched various tablet-based education solution for Indian schools.
Compliant with the school syllabus, it gives students access to rich digital content as well. The solution is
bundled with devices produced by preferred tablet manufacturers. Bundling of educational content with tablets
is a growing trend.
• The current market size for digitized school products in private schools alone is around $5 billion. The current
market size for ICT in government schools is valued at US $75 billion, according to studies.

AMAZON IN INDIA

• Amazon became the “game-changer” for book retail in India, when the Indian government began considering
opening up the multi-brand retail sector to foreign direct investment in 2012. FDI up to 100% was allowed in
single brand retail in November 2011. After much debate in the country, when FDI norms were finally laid down
for multi-brand retail, only up to 51% of FDI was allowed. For Amazon, which sells books published by several
different brands, it would have had to form a joint venture with an Indian company to be able to operate here.
Additionally, FDI in both single and multi-brand ecommerce companies is prohibited, making it impossible for
Amazon to operate its current business model in India.
• The company entered the Indian retail space when it re-launched Junglee.com in early 2012 as an aggregator
service, after having acquired the website in 1998. It was seen as a move to gain insight into the market while
Amazon waited for the debate on the FDI law to be resolved.
• By 2018 Amazon has showed a 200% Y-O-Y growth in the eBook segment in India.

GOVERNMENT PLAYS A BIG ROLE

• The government of India, under the National Mission for Education Through ICT (NME-ICT), has identified as
major components of its mandate “content generation and connectivity, along with provision for access devices
for institutions and learners.”
• More than 5,000 E-journals and 65,000 eBooks from more than 300 publishers have been made available online
under this program. E-content is being developed by various agencies: for 996 courses in engineering, sciences,
technology, humanities, and management by IIT Madras; for 87 undergraduate subjects by Consortium for
Educational Communication; and for 77 postgraduate subjects by University Grants Commission.
• Under the National Library and Information Services Infrastructure for Scholarly Content (N-LIST) of INFLIBNET,
the online digital library being run under NME-ICT, nearly 80,000 eBooks and thousands of high-quality paid E-
journals have been made available to research institutions, universities, and colleges across the country. Almost
90% of the eBooks are sourced through foreign sources.
• The government’s “One-Stop Education Portal,” Sakshat, is aimed at becoming a repository of educational
resources for teachers and learners—from kindergarten onward. The portal houses virtual classrooms and self-
learning materials.
TRENDS AND DIRECTIONS

• The Indian publishing industry is witnessing a “boom” over the last five to six years. Print as a format is likely to
stay on here for longer than in the mature markets, even though eBooks offer several advantages to a
developing country such as India.
• Rapid changes in publishing technology, taking place primarily in the West, have created challenges for Indian
publishers. Technology capabilities and the investments required to embark on eBook publishing programs are
proving to be a stumbling block for many “traditional” publishers, but there is awareness of the opportunities
that lie ahead with eBooks.
• Many small and independent publishers are affected by the changing dynamics created by foreign capital
flowing into the book industry, and also into book retail. eBooks are seen as a way out by such publishers, but
the infrastructure required to transition from print to E-from production to marketing and discovery will need to
be tackled.