Posted on 2013-Nov-15
Being a late game player in Indian eBook market, Kobo has so much to say how it can catch up with its competitors and expand its business into the East. Amazon made the similar move earlier in June this year and entered the market known for its huge potentials. Despite the fact that most Indian customers do not have a credit card to shop online and the country’s infrastructure is somewhat developing, online retail sales are expected to grow to $76B in in the next 8 years.
A Billion-Reader Opportunity
According to Wikipedia, India is the world’s second-largest English-speaking country. The total number of English speakers is 125 million. Now is the time that Kobo strikes back for “A Billion-Reader Opportunity”. Earlier last month, Publishing Perspectives analyzed Kobo’s business expansion into India. Malcom Neil, the company’s Director of Content Acquisition for APAC region, said that the company had set up its office in the country and worked with local partners. Kobo discussed with book publishers that have not had eBooks brought to the market yet. According to Mike Serbinis, Kobo CEO, he said that the company aimed to enter several developing markets such as China, Russia, and India.
Although the sales of eBook are reported to be less than 1% of total book sales, Neil is positive that the eBook market will double its growth very soon saying, “We estimate that the market for digital books in India will shift to in access of 2% of total volume of sales of all books, in six months.”
Tablets and Smartphones Sales
However, based on the survey done by the CyberMedia Research, the sales of tablets and smartphones showed a stellar growth that has eclipsed the eReaders sales. In the second quarter this year, the shipments of tablets grew 107.4% where the smartphones’ shipments in the first quarter illustrate 167.3%. Even though there is no data to back up the sales of eReaders, the Kindle is reported to be the only eReader that dominated the market.
While the competition in the local market is challenging, Kobo seems to be confident about their EPUB support that differentiates the company from its competitors. At this stage, eBooks start to gain traction, especially in fiction.
Close Ties with Partners
The recent interview with Wayne White, Kobo’s Executive Vice President and General Manager, will further shed some light on the company’s future business plans in an article from The Wall Street Journal. The first question involves the unavoidable competition with Amazon. To compete with Amazon in several markets, he said that their business model relies on its partners: publishers and booksellers. Having maintained its focus on one business, he believes the company is not trying to “steal the customers” from its partners.
Open Ecosystem and Extended Service
He also emphasizes on the open ecosystem that makes it easier for readers to access and transfer their eBooks to any device they want. So far, Kobo has four million books in their catalog. The company plans to get 30% of the market share and expand the service to cater to international languages, especially in India and Asia regions that where there are many local languages.
Being aware that there are potentials in the Indian market, Kobo has worked with some of their local partners for a year. The company’s strategy is to succeed in 70+ cities in the country. In the backdrop of the country’s initial phase of digital reading, he believes that the growth rate of digital reading can be progressive and forecasts that it can reach up to 30% in five years as opposed to the current 1%. Nonetheless, there are challenges that need to be resolved like any unique market. Indigenous languages are of the company’s challenges. Furthermore, in India and China, the percentages of small shops in retail business are very substantial. Price sensitivity is another challenge that the company must remain competitive to be in business.
With ongoing plans to expand their business overseas, eBook vendors start to enter emerging markets as they can see the stellar growth rate. Referring to the research and English-speaking statistics, Indian market will undoubtedly be an ideal choice for content creators especially when tablets and smartphones owners start to embrace digital reading on a regular basis. Being late in the game, Kobo seems confident to compete with its competitors through the local partners’ know-how; the company’s strengths also lie in competitive eReading devices and open ecosystem to give their customers convenient access to content.
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