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Amazon arrives in India, (should bookstores depart?)

I head a publishing house that many believe is as Indian as can be. Some insist the holding of the company classifies it as a foreign one. I am not sure how this really matters except to the tax man. At the end of the day, I am an Indian, 99.99% of the staff in SAGE India is Indians. I am leaving a margin of 0.01% for the odd person who might be of  Indian origin but holding a foreign passport, employed at SAGE that I am may be unaware of.

And this bit of information has really nothing to do with Amazon or the gist of this article. It is perhaps a disclaimer that my point of view is that of an Indian CEO, of a publishing house. But to understand my point of view I need to rewind to a time before the advent of Amazon or online sales (of all types).

I was born in Mumbai and lived in Shivaji Park. From an early age I was forced to read. The main source for books was Prabhat Circulating Library. It morphed into the Prabhat Book Store and Gift Centre many years ago. It is still located near Shiv Sena Bhavan in Mumbai. I remember browsing hundreds of titles before honing in on Hardy Boys, Nancy Drew, Mallory Towers, etc. For a locality that had voracious readers there wasn’t a single bookstore worth mentioning. Prabhat library was it. And the question is why?

I moved to Bangalore and the first bookstore I frequented was in a toy store, Sapphires on Brigade Road. Then came the colossal Gangarams on MG Road.

There was one thing common between all the bookstores of yesteryear.  The owner decided the type of book he wanted to stock. Shivaji Park didn’t have any bookstores, Prabhat didn’t sell books, they were a lending library. Sapphires stocked books for boys up to the age of 14. It was much later that they started stocking for other age groups; I don’t think they exist as the same entity today. They are now a complete toy store! Gangaram’s had the best selection. It was still run by a family who understood the books business.

I read an interesting article on a blog where the author makes a plea “to support local businesses”. The article talks at length about discounts that chain stores like Landmark and Crosswords get from publishers. He also states that mom and pop bookshops get lower discounts etc. But the dynamics of business need to be understood before one starts wondering at the rise of a behemoth called Amazon.

The mom and pop shops, small businesses were started by passionate people, and in a world of no options, they thrived. But which one of them really cared about their customer? The author of the blog tries to make an emotional plea about the corner bookstores that had the books we liked. I am sure his corner bookstore had the books he liked, mine didn’t leave me with any choice. I had to buy a book based on what was before me. The ocean of publishing was a mirage. And that was the story until an Amazon came along. I will let go my publisher’s hat and put on that of an average consumer. I want  choice, I want options but most of all I want the education to make a choice. By education I want to know something about the universe within which I want to choose what I want to read and what I want to buy. And as a customer I want to voice what I feel about the product I bought. And no corner bookstore has thought about doing this for me. Book stores have been governed by what a publisher could push and what a book store owner would stock. This policy led to the demise of many an author and made some publishers very, very rich. It was a world of stark contrasts that failed to take care of one key entity, the customer!

Let’s take the case of the larger bookstores. I have always followed what is now popularly known as the hedgehog concept. You must excel at one thing but to be open to absorb change. Globally the likes of Borders have shut down. Their reasons were many. The most common one has to do with the advent of ‘e-retailing’, (referred to as the whale called Amazon). In India, Odyssey shut down before Amazon arrived and long before Flipkart became a household name. Landmark and Crosswords struggle but as a publisher, I would say they are already dead from the inside.

Crosswords was started by a book distributor and the person in charge knew books. The one big change the store brought was the sheer range of subjects that they carried. I remember their flagship store on Bhulabhai Desai Road, Mumbai as one of my favourite places to shop. And I only shopped for books. Many of my personal collection (of books) are from this single store. My favourite sections were Occult Literature and Alternate Medical Therapies. I don’t think at the time any other bookstore had a SINGLE title in these categories, let alone a shelf with multiple options.

Landmark had a beautiful store (might still exist) on the ground floor where they had their erstwhile corporate office in Chennai. I refer to the time before the Tatas bought Landmark. That store had books and it had them well classified.

And then things started going wrong. The first thing in common with both Crosswords and Landmark is the change of ownership. The second thing in common is they forgot what the stores were supposed to do.

Landmark started adding sections and at last count, it even had a SAMSONITE luggage section (Parel store which has now shut down). It resembled a department store where you could buy jewellery, watches, toys etc. Crosswords started resembling a music cum movie CD/DVD store. Both of these chains lost the picture completely. Book selling is a tough business and I am very conscious of that. The new management of both these stores were surely concerned about driving revenue and wondered how best they could do this. Adding product lines was perhaps a sound strategy but it has proved fatal. There was another problem that many are unaware of. The book buyers (for both these stores) had NO CLUE about the content they were buying. By this I don’t mean to state that they didn’t know how to choose the books they bought. They didn’t know what to buy and when they did make a buying decision, they didn’t know how to get it to the customer! They stocked books in the WRONG section. I cannot help but shudder to think that one of SAGE’s titles Tectonic Shift, a management book by the legendary Jagdish Sheth, was placed in the GEOGRAPHY section! And I discovered this at the Crossword bookstore in Kemps Corner!

Another angle to doing good business is ethics. SAGE stopped doing direct business with Crosswords many years ago. I have sufficient proof to state that as a business entity, they are unreliable. They have broken every single commitment they made, be it on payments to be made or on stocks to be returned. When I first asked my team to close Crosswords’ account there was an uproar. I was told that we shouldn’t do it because it affects our visibility. They now understand the wisdom of the decision. Landmark is another case where SAGE’s legitimate dues remain pending. 

Authors are often irate that their book isn’t at a bookstore they visited. With due respect to all book store owners, they do tell a different story to authors than they do to publishers. My simple approach to an irate author is that I am willing to send stocks to any store, if the author can guarantee that once the stock is sold, I will receive my payment. It demonstrates SAGE’s intent clearly. There are exceptions that get all the support they need. There is Ram Advani Booksellers in Lucknow. We don’t do much business in rupee terms. But there is never an order that SAGE refuses from them, nor do we hesitate to extend any needed credit period. And I could name a few more such entities.

Amazon’s arrival has sent the book distribution system into a tailspin. In the last 24 hours I have received at least 3 clear pitches of how certain entities are “exclusive partners” with Amazon. A classic ploy to gain early advantage, creative, but not really impressive. Amazon has been in touch with publishers for over a year now. We are aware of their engagement policies.

But does all of this answer the question I began with? In part it does. In India online buying is a fraction of that in the West. There is room for co-existence but the models have to be focused. Books are similar to commodities. The buyer wants them when he wants them and will part with his money ONLY when he is satisfied that his money is well spent. Online stores provide the convenience and pass a significant chunk of the discount to the end-user. It is time for the customer to feel like a king. And there is nothing wrong with that. On the flip side is the infrastructural challenges that online stores face. And it is here the hedgehog will thrive. Some may say, not for very long and I am reminded of Books-a-million in Washington DC. It still holds fort where the others have felt the ‘Amazon’ effect.

Call me cynical, or a publisher with a myopic view, I remain in favour of the customer. Every business exists because someone somewhere is willing to pay for a product or service this business provides. It is time he is made to feel like a king. Amazon is here to make the end customer feel wanted and feel rewarded.

I choose not to respond to the comment in the article (the one I called interesting article) about Amazon being a foreign entity taking money out of India. Amazon will be taxed for its profits in India. It will generate employment in India. From a purely business point of view, it would be stupid to take money out for the next decade or so. India is a huge opportunity for growth and everyone doing business in India recognises it. You need to invest to grow. SAGE like many publishers has not repatriated a single rupee of their profits to overseas share holders.

The prime responsibility of a publisher is dissemination of content. Whether one likes it or not, Amazon is a key link in achieving this objective. Whether Amazon or Flipkart, or another one waiting to join the bandwagon, it is time make the customer the centre of business strategy.

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