Amazon: Will a digital-only strategy work in India?
Reuters reports that Amazon is expected to set up a digital bookstore in Brazil in the fourth quarter. It quotes an unnamed industry source as saying: “Brazil would be the first country Amazon enters only with digital (products) and that is because of the logistic and tax difficulties.” I wrote to Badri Seshadri, co-founder of New Horizon Media (and earlier Cricinfo) asking if a similar – digital-only strategy – will work in India. He responded by saying it won’t. He gave these reasons.
- Brazil is the largest Portugese market (larger than Portugal), and Portugese uses the same Roman font set and hence will work in Kindle platforms immediately. On the other hand, in India, you will have to get into Indian languages and Indian languages do not work in Kindle platforms as of now. It will require some technical mucking around, which Amazon is unlikely to do for a while.
- India is the third largest English language book market (after US and UK). Most of the rights are with US/UK publishers or their Indian subsidiaries. In the print book space, India has a special Indian edition and Indian pricing, which is at least 50-70% lower than the US/UK pricing. (Typical first edition US pricing is 20$. In India, it is mostly INR 200-300.)
Therefore, for the e-book to succeed, the Indian e-book pricing must be at least 30% lower than the Indian print pricing. It may be possible then for e-piracy to the largest e-market such as US. Amazon may want to avoid this.
There will be no worthwhile business, if Amazon focuses only on those books which are purely produced in India (Rupa & Co., Westland, Roli Books, Amaryllis, Jaico and such).
- Amazon has already decided to look at a brick and mortar business in India and is probably only looking at a special permission via FIPB or expecting a change in retail policy from the government.
In summary, Badri wrote, “Brazil’s single language different from English, roman font set, very large population and willing publishers makes it ideal for this experiment. None of the above is present in India. For that matter, even Russia is not likely to be in their horizons because of the lack of Cyrillic font support in Kindle hardware.”
Let me know what you think.
Accenture on Europe
For a long time, we have heard industry officials complain that Europe is not as open to outsourcing as US is. The general feeling is that financial crisis earlier and eurozone crisis now might have made the companies even more inward looking. Accenture suggests in a recent analyst call the opposite is true. Pierre Nanterme, Accenture’s CEO, told analysts: Outsourcing heats you up so to speak, through U.K. and the Nordic countries for all sorts of reasons. And what we’ve seen recently and the last quarters, it is indeed outsourcing now. There is a greater acceptance, if you will, in all the Continental Europe countries, and this is driving a new source for growth in outsourcing business. And so that dynamic now is starting and is creating a bigger market for outsourcing in Europe.
Read the transcript of the call here.
Hybrid models in BPO
Here’s an interesting chart i found in a report: A Blueprint For The Industry Known As “Outsourcing” by HfS Research, a website that tracks BPO sector.
The big takeaway is that outsourcing is not the dominant model. This of course can be seen as an opportunity. (The old ‘no one wears shoes in the island – and hence it’s a great opportunity’ logic.) But HfS also says that hybrid models work better than the others. “At the end of the day, it’s not all about outsourcing and it’s not all about shared services; it’s about focusing on how to globalize processes, how to transform finance (and other) functions, and how to govern it all in a global business services context. There is no dominant model; it’s more about achieving the right balance across all delivery models to achieve the best goals.”
Also of interest:
- RIM Is Hurting, But It’s Not Dead Just Yet: Techcrunch
- The extra second that crashed your favorite websites: PC Mag
- What we do is actually good for the U.S.- Som Mittal : The Hindu