Booked for success

Even as Penguin's David Davidar prepares for a high-profile overseas shift, the Pearson Group is poised to turn a new leaf in the publishing industry

It couldn't have been a more modest beginning. Eighteen years ago a young journalist named David Davidar opened an office in a two-bedroom flat in Delhi's Gulmohar Park. He had a staff of two and a mandate to kickstart Penguin's operations in India.

The rest, as they say, is history. Today Davidar presides over a publishing empire that has a turnover near Rs 100 crore. Penguin itself has a staff of around 80 and brings out around 200 books a year "" including some of India's best known writers in English.

On the way, Penguin has helped to transform the fortunes of India's English book publishing industry.

It's an empire that has grown in fits and starts. Penguin Books is controlled by Britain's Pearson Group which has diverse interests. One of its arms, Pearson Education, is making an aggressive thrust in the Indian market.

Also, there's Dorling Kindersley (DK) which came into the Pearson fold after an international acquisition in 2000; its editorial team here serves as an outsourcing unit for Dorling Kindersley UK. Davidar, the architect of Penguin's success in India, presides over all three.

Davidar is about to commence a new chapter in his career. In January he will take charge as publisher, Penguin Canada which "" in terms of turnover "" is about seven times bigger than Penguin India.

Nevertheless, he is bubbling with enthusiasm about what could happen in India in the next 10 to 15 years.

"India is the fastest growing English-language market in the world," says the urbane Penguin chief, lounging in his plush Panchshila Park office.

Currently, there are only around 7 million to 8 million Indians who use English as their first language. But in the post-liberalisation era, says Davidar, there has been a steep increase in this number, and the customer base for English-language publishers is widening significantly.

"The world is getting smaller, there are far more Indian children today with English as their first language than there were even 10 years ago. As they grow into adulthood, the sky will be the limit for publishing in English."

The figures for the Indian publishing industry are nebulous, but estimates suggest sales of Rs 7,000 crore "" between 40 and 45 per cent of which is English publishing.

Of this, school and higher education books account for Rs 2,000 crore to Rs 2,500 crore while general publishing is in the range of Rs 800 crore. The industry is growing at between 10 per cent and 15 per cent annually.

Davidar is loath to divulge the group's net worth but says "you're not far off the mark" when the figure of Rs 100 crore is thrown at him. "I can tell you we're not there yet," he says, "but we hope to be soon. The goal for the group is to be number one at the soonest."

He's palpably enthusiastic about his new job, mainly because it'll help him focus on editing. It might also mean more reading time; he currently averages 50-odd books a year, apart from the 30 to 40 books he has to go through as part of the job.

Speed-reading and simultaneous reading have helped him cope, but clearly he's been wearing too many hats and the shift will provide a needed change. "I don't want to spread myself too thin," he says.

Some have suggested that's exactly what Penguin India has been doing "" over 200 titles a year can mean much flotsam and jetsam. But as the proudly populist Davidar says, "Books are there to be read. I believe there's place in the market for more than what is labelled as high literature."

That said, he agrees that the yearly output is unlikely to increase much more. "Globally, Penguin's strategy is to try and sell fewer books better," he says.

"After a point, you have to realise capital is finite." Thomas Abraham, who will replace Davidar as Penguin India's head honcho, concurs.

"Around 220-225 books is critical mass for us," says the genial Abraham, currently the company's general manager, marketing. "There is a limit to what distribution can take."

Where does that put Penguin India in a global scenario? The company is bigger than Penguin New Zealand and Penguin Singapore in terms of volume of books published, and roughly the same as Penguin South Africa.

However, the company's Indian operations are much smaller than those in the US or UK, where Abraham estimates over 500 books are published annually. Davidar says Penguin Canada is around seven times bigger than Penguin India: "Their 99 per cent literacy makes a big difference."

Abraham says the rule of thumb for a book being labelled a blockbuster in the Indian market is 5,000 to 6,000 copies sold. "Around 15 to 20 Penguin India books reach that mark annually," he says.

Around 10 to 12 Penguin books have sold over 50,000 copies since the company began its India operations.

Abraham is looking closely at getting into academic areas without impinging on Pearson Education's territory "" by publishing classics with study notes, at prices Indian students can afford.

The company is also launching its Ladybird range of children's books in October. Business books "" popular management and the like "" are in the pipeline too.

The company's marketing and promotional activity needs to be strengthened, says Abraham. "We'll be moving into MIS systems and direct selling is also in the works."

Of course, Penguin India is already the top dog in its field "" general trade publishing "" by a huge distance. So, much of the onus for growth falls on Pearson Education.

Subroto Majumdar, president, Pearson Education (Singapore) PTE Ltd, says exact growth rates are hard to determine given the multiplicity of school boards, but he does throw up a telling figure: between 1995 and 2000, the number of private schools in the country doubled.

"The college market is growing at around 10 per cent and the school market at a slightly faster pace, which we see as a big opportunity," says Majumdar.

With a growth rate between 25 per cent and 30 per cent, his company is outperforming the industry, he adds.

In India, Pearson sold around 20 lakh units last year and the projections for this year are 35 lakh units. The company's vision is to be India's largest education publishing company within five years.

Pearson Education began operating in India in 1997. Since the company started printing locally in 2000, its costs have reduced by 20 per cent. Engineering textbooks have been a strong point but it is now expanding into other areas like sociology and psychology.

Naturally, such topics will require India-specific content. "Technology is the same globally," says Majumdar, "so we didn't have to reinvent the wheel when publishing engineering and computer science textbooks for the Indian market. But this is different."

Majumdar is a publishing industry veteran, having earlier worked for Oxford University Press (OUP), one of Pearson's chief competitors. Where does he feel Pearson scores over its rivals?

"We are a younger organisation with a dynamic team, better computer and ERP systems, and are far ahead in terms of tracking sales online," says Majumdar.

"We also have the largest warehouse. Contentwise, the competition is well aware of Pearson's standing globally." But, he adds, the size of the education market is so big that there's room for more players, and competition is not yet a major concern.

Naturally, Davidar has the last word. "Today, writers are India's only global superstars, outside of the IT industry," he says, with all the confidence of a man who knows he's in the right industry at the right time. "It's a glorious time for Indian publishing."