Publishers throw the book at online discounters

Book-lovers are having a great time, what with huge discounts offered by e-commerce players, while publishers are facing the music. Now, book publishers have sought policy as well as legal intervention.

The Federation of Publishers’ and Booksellers’ Associations in India (FPBAI) had recently written to Prime Minister Narendra Modi and the Ministries of Finance, Commerce, and Human Resource Development, complaining about the ‘questionable trade practices’ adopted by e-commerce majors such as Flipkart and Amazon.

S. Chand, a well-known publisher of text books, had also served legal notice to Flipkart, accusing it of modifying discount structures, violating the clause, and retailing only their fast-selling titles.

BusinessLine has had access to both the letter to the Prime Minister as well as S. Chand’s legal notice to Flipkart. The FPBAI letter seeks action to protect the publishing trade. It says: “E-commerce stores purchase at lower discounts from publishers and distributors (as per information collected from some well-known publishers and their distributors, the maximum purchasing discount was 35-45 per cent) and sell at higher discounts, making a loss in each transaction. It is indeed a questionable activity.”

Failing to compete with the flood of discounts offered by e-commerce firms, bookstores such as Capital Book Depot in Chandigarh, Teksons and New Book Depot in Delhi have shut shop, while many others are struggling for survival.

SC Sethi, President, FPBAI, told BusinessLine : “The cultural fabric of the book world is dying. E-commerce entities are pushing best-sellers and other authors and budding writers are kept out. We are not against the online business but against the spirit of those who wish to wipe out the competition and then create a monopolistic opportunity.”

Follow France

India can take a cue from France which, last year, had shown support to book-sellers by passing a Bill that effectively stops large chains from engaging in aggressive price wars with smaller rivals. France has barred e-commerce players from offering free delivery to customers on top of a maximum 5 per cent discount on books.

S. Chand, after sending a legal notice to Flipkart, has snapped all ties with the e-commerce giant. Navin Joshi, Business Head, S. Chand Publishing, said: “Six months ago we had sent a legal notice to Flipkart and after that stopped supplies to the company. However, Flipkart continues to sell our books by sourcing them from wholesalers.”

The problem is that these companies are creating a lot of disturbance in the market, Joshi said, besides hampering the publisher’s tie-ups with book-store owners, which cannot compete with Flipkart’s discounts.

Pitching for a cap on discounts, Kinjal Shah, CEO, Crossword bookstores, said: “E-commerce giants want to develop a very monopolistic market by enticing customers with huge discounts. We believe that both online players and retail chains can co-exist if a healthy environment for a cap on discounts is created.”

Manas Mohan, CEO, Publishing, ACK Media, which brings out Amar Chitra Katha titles, said: “The sad truth is that book stores which fail to keep up will go out of business. We are having serious discussions with book-sellers in order to tackle this problem.”