By Maria Fernanda Rodrigues

This time last year, Brazil had just one e-bookstore –- Gato Sabido –- which offered a grand total of 150 e-books. The only e-reader you could get was the Cool-er that Gato Sabido sold. The company was the proverbial big fish in a small pond. Today, the pond has grown and the fish have gotten bigger: important Brazilian retailers such as Cultura, Saraiva,Ponto Frio, Casas Bahia, Singular and Grioti have all entered the e-book business in the past year. In addition, the e-content distributors Xeriph and Simplíssimo are getting ready to offer white label e-bookstores and that could help small and medium companies to plunge into this new market.

Throughout 2010, publishers raced to digitize their catalogues (without even knowing whether to start with the back-list or with the new releases) and the results are showing. Today, Gato Sabido sells 2,800 titles in Portuguese. Cultura and Saraiva have 2,000 each. When it comes to English titles, the number is far higher: Saraiva offers 205,000 in English and Cultura and Gato Sabido have approximately 130,000 each. Ponto Frio and Casas Bahia –- two popular electronic and furniture shops that are part of the same retail group — are also experimenting with e-book retailing and offer 210 titles in Portuguese (they don’t sell foreign books yet). Grioti was the most recent company to launch and, as of January, offer 870 titles.

French bookstore and electronics chain FNAC was left behind, though it is worth noting that the chain was chosen by Apple to host the national launch of the iPad in November, perhaps because no competing e-books can be found on their site.

In order to speed up the offer of content, five publishers banded together to launch an e-book distributor, the DLD. Meanwhile, Duda Ernanny, the owner of Gato Sabido, came up with Xeriph, another distributor. Simplissimo, which is helping publishers to convert the books, is about to launch their Stealth Plataform; one their first clients is Traça, a traditional bookshop for used books. Meanwhile, Singular, the digital arm of Ediouro group, is positioning itself to be a hub of digital distribution for POD and ePUB files.

Although there are more titles available now than last year, digitization remains the greatest barrier to the development of the e-book market in Brazil: The simple fact is that many Brazilian publishers are still ignoring the digital world. Another obstacle is rights. Most contracts for Brazilian titles -– by foreign or domestic authors -– have not included clauses to cover digital rights, so the publishers need to go back to agents and writers to renegotiate before launching e-versions of their catalogs.

And there is one more significant problem: e-readers are still unreasonably expensive and it’s keeping buyers at bay. Cool-er, the first e-reading device available in Brazil, is priced a R$699 (US $418) while the iPad ranges from R$1,649 (US $987) to R$2,599 (US$ 1,556). The Positivo Alfa and iRiver Store are also available in stores. And for those who prefer to import Amazon’s Kindle 3G/Wi-Fi, they will get it for more than double what it cost in the US – something like US$ 409 (half of which is import tax).

Retailers have been reluctant to talk about sales figures for e-books Are they too small? Probably. However, Gato Sabido is not ashamed to report that they sold 10,000 e-books last year, and another 50,000 free e-books were downloaded from their site. Those are impressive figures considering that just 1,000 Brazilians have bought a Cool-er. Cultura, the second highest grossing e-bookstore, reported a sales increase of 200% from their e-bookstore’s launch in June to the end of the year.

Yes, 2010 was the year that the expected digital future finally started to become a reality in Brazil. It is true that the e-book market is still nacent, but it is also true that the book industry is doing what it takes to make everything ready for when it starts to catch on with the mass market. That day will only come when e-readers are priced more affordably and e-books are priced cheaper than printed books.

That’s not to say that Brazilians aren’t open to trying new technologies. They are. A recent research study by Accenture looking at consumption in Brazil, China, India, Russia, France, Germany, Japan and USA, noted that that Brazil was among the leading countries in terms of electronic gadget adoption, with mobile devices and notebooks topping the list. The researchers also asked about the what customers intended to purchase in these countries in the coming year. The result, let’s just say we can expect e-reader sales to grow some 133% in 2011.

DISCUSS: Could Brazil and South America Surpass the US, Asia and Europe in E-book Adoption?