The second day of the Indian Magazine Congress (IMC) 2010 organised by The Association of Indian Magazines (AIM) offered some interesting presentations and discussions. One of these was a lively panel discussion on 'The Changing Distribution Landscape'.
The panel comprised three very eminent names in the industry - DVS Rama Rao, chief general manager, sales and operations, Media Mart; Niraj Rawlley, vice-president, circulation, Outlook Group; and Rajagopalan Nair M, chief general manager, circulation, The Week. The discussion was moderated by Ashish Goel, chief operating officer and chief financial officer, ACK (Amar Chitra Katha) Media, who proved to be an engaging and humorous moderator.
"Better quality of PoS (Point of Sale) space is needed for better display," he stated. As far as the latter is concerned, Goel exclaimed, "Information is the biggest roadblock for growth in the magazine industry." He aided this point by citing some eye-opening figures. "There prevails 22-25 per cent stock loss due to unsold magazine returns and 15-20 per cent sale loss due to magazine stock outs."
This revelation was followed by a talk by Rao, who, after expressing his gratitude to AIM for allotting time for an entire panel discussion on the topic of distribution, delved into several crucial issues on hand, the most repeated one being how magazine distribution is in bad shape in India.
He insisted that publishers should be willing to invest in channels that allow distribution directly to the consumer. "Newsstands are responsible for an average of 80 per cent of total circulation," he informed. He went on to enumerate the pros and cons of newsstands. "While this is a traditional and easily accessible mode of distribution with high share of sale and voice, there exist the problems of lack of space and visual clutter. We need new roadside kiosks like the ones in China and Spain."
He claimed that currently, no new outlets are cropping up and to worsen things, the existing ones in Delhi, Noida, Pune and Mumbai are under threat.
Citing solutions to these predicaments, Rao added that the morning vendor could be a cost-effective distribution channel as the consumer could get a copy at the cover price and there would be no issue of unsold copies coming back. He said, "There are 72,000 line vendors who deliver millions of newspapers across India; publishers must invest in this system and develop it for optimal distribution. Also, publishers need to market not just the brand/title of their magazines but also the content; indirect marketing must not be ignored."
Nair took over after a thunderous applause and stressed on the new and upcoming styles of magazine distribution. He shared that owing to government restrictions, pavement hawkers and small retailers in metros are very few. Emerging distribution trends, according to him, include book distributors (such as Crossword), non-conventional spaces such as petrol pumps and supermarkets (these two options bring with them a high placement fee), vending machines at travel points (such as airports) and home delivery by line hawkers.
Nair continued, "Suggestions include assigning agencies for distribution in high rise residences, selling publications in educational institutions, selling magazines through the staff on pantry cars in long distance trains and increasing vending machines at travel touch points such as bus stands and railway stations - currently our railways don't have a policy that allows this." He ended by saying that a consensus, about paying a reasonable placement fee at premium stores and modern retail outlets, is required.
Rawlley revealed some facts that underscored the points made by the other panellists. The market size of the magazine industry, he shared, was more than 25,000 sale points, out of which that of English magazines was 16,000-18,000 sale points. Moreover, over 90 per cent of the industry is full of unorganised distribution channels.
The challenge, in his opinion, is the shrinking footprint in metros due to beautification drives and clutter of magazines/limited display space, amongst several other pressing issues. "There must be sound distribution across all zones and we need to speed up the process of getting magazines onto shelves. Also, the placement costs of servicing chain stores/travel locations need to be reduced and more NCOs (non-conventional outlets) should be opened," expressed Rawlley.
Optimistically, Rawlley concluded that the emerging organised channels, though only 10 per cent of the total industry, pose an excellent opportunity to improve the current distribution scenario for magazines in the country.