By Eugene Gerden
Amazon.com, the US multinational electronic commerce company, is starting a massive expansion into the Russian books market, and has begun signing contracts with Russia’s largest publishing houses to supply electronic content to its Russian store.
According to Amazon, at the initial stage the company will sell only digital content in Russia, while later will expand to print books. Currently, Russians buy tens of millions of dollars worth of print books and other media from Amazon, though these are ordered from overseas sites (and consequently, an alarmingly high percentage is “lost” in the post).
Amazon has already hired Arkady Vitruk, a well-known Russian expert in the field of publishing business and book market and former head of Azbuka-Atticus publishing house (one of Russia’s leading publishers) to run its Russian branch. And thus far the US company has already signed a contract with Rosman, one of Russia’s largest publishers of children’s literature.
According to Rosman CEO Boris Kuznetsov, the launch of Amazon’s ebookstore in Russia is a long-awaited event. He also added that at the initial stage Rosman will supply just a fraction of its titles — some 100 to 150 — primarily reference, children’s and YA titles, with the expectation that the number will double by the end of the year.
Amazon is also known to be holding talks with some other leading players of the Russian book publishing market, though no additional publishers names have been made public.
Sergei Anurev, CEO of Litres, Russia’s largest distributor of e-books and a current competitor of Amazon, says that Amazon’s Russian model is likely to follow a similar pattern to that established by their launch in Brazil, which also initially focused on e-books. In geographically expansive countries like Brazil and Russian, with limited infrastructure in rural areas, sales of print books will require significant investment in logistics, including warehousing and distribution.
According to Andrew Cechin, head of commercial projects Ozon.ru, the largest Russian online retailer, delivery of digital media content in Russia will be more profitable for Amazon than would establishing a large-scale logistics operation from scratch.
At the same time he also believes that the arrival of Amazon to the Russian books market means that Western players are likely to show increased interest in expanding into Russia, where there remains a significant opportunity for growth despite increased competition.
However Cechin has also warned Amazon that any further expansion into Russia may face with serious problems, particularly when it comes to distribution. He points out that while Ozon works in partnership with Russian Post, a national postal operator of Russia, most of its orders the company delivers by itself, as the reliability of the Russian postal service leaves much to be desired.
Representatives of Amazon Russia declined to comment on this story.