asia globe

Why Opportunities in the BRIC Countries May Be Overstated

In Discussion by Edward Nawotka

By Edward Nawotka, Editor-in-Chief

asia globeIn today’s Ranking of Global Publishing Markets released by the International Publishers Association (IPA), China comes in at #2, Brazil at #9, India at #10, and Russia at #13. It’s an impressive showing for some very large and flourishing countries. Yet, at the Publishers Launch Frankfurt conference at the Frankfurt Book Fair on Monday it was made clear that the opportunities for foreign publishers to work in these giant evolving markets may be somewhat overstated, as the obstacles to enter these markets can be significant and the situation on the ground somewhat less rosy as is typically reported.

In Brazil, the complicated tax and legal system has largely kept many of the big international e-book retailers at bay, noted Carlo Carrenho, publisher of PublishNews Brazil. “I honestly don’t even know if the agency model is even legal in Brazil,” he admitted. (For more on Brazil, see our special coverage of the country in our forthcoming Frankfurt Show Daily issues on Wednesday and Thursday).

In Russia, the print book market is actually shrinking, with sales at bookstores down 8-10%, noted Alexander Garilov, head of the Book Institute, adding that he “wasn’t sure it was related to e-books.” Either way, with 25-30 million Russians owning smartphones and tablets, and that number expected to double or triple in coming years, Garilov says he expects the market to grow from 4-5% of the market to as much as 7-8% in the coming years.

The biggest challenge for Russian publishing — aside from the fact that, says Garilov, that “40% of publishing is owned by one man”—is likely to be the issue of rights, with many publishers having failed to secure digital rights or have remained reluctant out of fears of piracy — something Garilov took pains to deny was as rampant as previously reported (by us in particular).

China remains a powerhouse, but the market is closed off to from many foreign companies as a result of government restrictions. “Just three or four companies are licensed to import e-books in China,” said Lisa Liping Zang, Director of the International Department at e-publisher Cloudary, but the government is reluctant to issue a sales license to a company like Amazon out of concern that they would not be able to fully control what goes on sale. “[The foreign companies] will have to win the support of the largest print publishers and most of those are state-owned as well.”

And while Cloudary — one of the largest, if not largest e-publisher in China, with 120 million users — has proven successful, they too have dealt with financial issues. A plan to list the company on the New York Stock Exchange earlier this year was scuppered as a consequence of the ongoing financial crisis.

India too has been ballyhooed as a potential export market, especially for e-books, something that Ananth Padmanabhan, Vice President of Sales at Penguin India, confirmed — with reservations. “Some things that have been said about the country are indeed hyperbolic,” he said, pointing out that devices are still far too expensive for the vast majority of the 300 million English-speaking Indians. “And this generation is accustomed to not paying for anything online, and even when they do they think they should be able to buy one copy and then share it with everyone else.”

In addition, 70% of the trade market in India already occupied by international titles, so expecting foreign publishers to take additional marketshare may very well be wishful thinking.

For more on the Publishers Launch Frankfurt conference see our Storify Twitter stream from the event.

About the Author

Edward Nawotka

A widely published critic and essayist, Edward Nawotka serves as a speaker, educator and consultant for institutions and businesses involved in the global publishing and content industries. He was also editor-in-chief of Publishing Perspectives since the launch of the publication in 2009 until January 2016.