Potential for Kindle for mobile in China, India, Russia, Brazil

Amazon have released Kindle for iPhone and Kindle for Blackberry and, if the Dell Streak flyers are accurate, are set to release Kindle for Android. Have been pretty critical of the sales potential for ebooks via these channels because they don’t compare well with dedicated eReaders – May or may not be under-estimating their potential.

Where I’m definitely wrong in terms of sales potential of ebooks via mobile is China, India, Russia, and Brazil. Mostly for two reasons -

  1. Most mobile owners in these countries can’t afford a dedicated eReader and might not be able to for a long time (2 to 4 years or more). This was pointed out in a comment (thanks!).
  2. The sheer numbers of mobile subscribers means that even single digit ebook reading adoption rates would translate to huge ebook sales. 

The number of mobile subscribers in these countries is highlighted by a recent post titled ‘Staggering mobile stats in Brazil, Russia, India, China’ at eMarketer.

There really are Ridiculous numbers of mobile phone subscribers in China, India, Russia, and Brazil

Here are the stunning numbers for mobile subscribers in BRIC -

  1. China – 747 million. It’s projected to grow to 1.3 billion subscribers by 2014.
  2. India – 525 million. Projected to grow to 853 million by 2014.
  3. Russia – 174 million. Projected to grow to 200 million by 2014.
  4. Brazil – 174 million. Projected to grow to 212 million by 2014.

Even 1% of that number (16.4 million) would be a tantalizing market. However, we can do better than just randomly guess at the market for books in these countries.

What are the sizes of the book market in China, India, Brazil, and Russia?

The numbers are really enticing when you dig a little deeper -

  1. Beijing Review estimated China’s Book Market at $5.6 billion a year in 2004.
  2. Russia’s book market is estimated at $3 billion a year in 2008 (courtesy the Frankfurt Book Fair website).
  3. The Bookseller estimates Brazil’s book market at $1.7 billion a year in 2008.
  4. India’s book market is estimated to be at $1.5 billion a year (courtesy Prayatna, figures are for 2005). The English segment is estimated at between 20% and 45%.

That adds up to $11.8 billion a year. Factor in the growth in India and China since 2004/2005 and these markets probably total up to about half the size of the US market ($25 billion a year).

Another point worth considering is that there’s a significant English-speaking population (courtesy Wikipedia’s list of countries by English-speaking population, the usual disclaimers apply) -

  1. India has the second largest population of English speakers in the world (232 million). 
  2. Even China and Russia have sizeable English-speaking populations – 10 million or so for China (alternate sources claim a 20 million figure) and 7 million or so for Russia.

The percentage of the population that understands English has been growing in both India and China and allegedly so has the reading population.

We have huge populations and huge book reading populations

The intersection between the book reading population and the cellphone owning population in BRIC ought to be reasonably high – Factors like living in cities, being middle class or better off, and knowing English probably increase the probability of both owning a cellphone and of reading books. 

It would be reasonable to estimate that at least the same percentage of mobile phone subscribers are book readers as is the case in the general population. Given that over 50% of the populations of BRIC have mobile phone subscriptions we ought to be able to reach 50% of the book reading populations in these countries.

If you don’t like that random estimate just cut it to 25%. It still leaves us with users who spend $2.95 billion a year on books.

Will all these mobile phone subscribers read books? Will they use Kindle for mobile?

We’ve already established (by means of totally random guesswork ;) ) that 25% to 50% of the book reading populations of the BRIC countries are available as potential mobile ebook customers.

Which brings us to some questions (with answers/guesses included) -

  1. Will users actually read on phones? Perhaps. People in Japan love to do it though they probably have very advanced phones.
  2. Will users pay for books? This is a good question. It’s possible that wider availability of titles and reasonable prices encourage more book purchases. It’s also possible that book piracy takes off.
  3. Will users use Kindle for Mobile? Given that the Kindle Store has lower prices than anywhere else (and that BRIC will be price conscious) it’s likely that they will choose Kindle for Mobile if/when they pay for ebooks.

This is the sobering part. We have a potential $11.8 billion market and 25% of that ($2.95 billion a year, a conservative estimate) is available via their mobile phones. However, there are several barriers to getting them to read on the phone and to pay for ebooks. We might only be able to capture 10% of the market.

How could Amazon leverage Kindle for Mobile in BRIC?

There are a few big weaknesses of the way English books and books in general are sold in these countries -

  1. Unrealistic prices for books. For example – Books in India are priced close to their prices in the US.  
  2. Low range and poor availability. A lot of books never reach BRIC countries and when they do the numbers are limited. All the transportation and storage issues affect availability (and probably the prices too). 
  3. Not enough targeting of non-English speakers. If you have an ebook store you can sell books in other languages and add ‘shelves’ at minimal cost.
  4. Low number of bookstores. Plus they’re difficult to get to and they’re not open 24/7. If you’ve driven in China or India you’ll realize that every trip to a bookstore is an adventure (that promises to be of the abruptly ending kind).
  5. Lack of Infrastructure – The publishing and bookstore model is built for countries with very good infrastructure (roads and transport) and where lots of people have their own cars or other reliable means of transport. It breaks down in most parts of the BRIC countries.
  6. Very high inefficiencies. Consider books that aren’t published in a BRIC country – They have to be shipped all the way, stored, displayed and sold. With mobile books it’s just a mobile download.

For a company like Amazon that loves kaizen and quality and improving things this is a fantasy. There’s almost no way to get into mobile books in BRIC and avoid greatly improving the status quo.

The question on potential market size is interlinked with the question of whether a good range of books is available at good prices and conveniently. The answer to the latter is most definitely not and it’s hard to answer the first.

The mobile ebook market in BRIC is a mystery

While we can say that there’s a huge potential market worth billions of dollars and that the current options and choices in BRIC (for reading on mobiles and reading in general) are terrible it’s hard to say what the reaction would be to a very good offering.

It’s the type of opportunity that might turn out to be colossal or might end up nowhere.

The good thing is that by selling ebooks and by targeting the major platforms (Nokia etc.) Amazon or another company could explore the BRIC market cheaply and quickly. It wouldn’t cost much to figure out whether the BRIC mobile ebook market is worth pursuing.

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