note demonetisation

How demonetisation has hit book sales (and what might happen at next month’s book fairs)

Still, everyone is hoping that dedicated readers won’t stop reading permanently.

In this season of frenetic literary activity, featuring book launches, literature festivals and book fairs, demonetisation has stomped in as the grinch who stole Christmas. Everyone knows the effects of Prime Minister Narendra Modi’s move to scrap high value notes overnight. One of the lesser-known victims is the business of books.

Publishers, distributers and booksellers are all feeling the pinch after over a month of dealing with the cash crunch. A reading of the latest Nielsen Bookscan ratings is all you need to figure the scale of loss in publishing, a sales team executive from Penguin-Random House tells Scroll.in. “As per the analysis of last four weeks, the total consumer market is down by 35% year-on-year,” he said.

Other publishers are observing even steeper drops. “Distributors have reported a 50% decline in sales in the first four weeks after demonetisation, though things seem to be looking up a bit now,” said Yogesh Sharma, VP, Sales and Marketing, Bloomsbury India. “But our sales to distributors for books that sell regularly are down by 20% so far in December.” The impact is deeper in Tier 2 and Tier 3 towns, where transactions by credit or debit cards and digital wallets are not popular, says Arup Bose, Publisher, Srishti Publishers & Distributors.

Books in regional languages, which depend more on cash transactions at every level of production, have been hit worse. Tridib Chatterjee, honorary general secretary, Publishers and Booksellers Guild, Kolkata, has said to news agencies that if the dismal turnout at smaller book fairs seen in the last couple of weeks is anything to go by, he is worried about the production of books, reprinting, and, more urgently, the mood and sales at the upcoming Kolkata Book Fair scheduled for late January. “Publishers are likely to bring out only one-fifth of their titles,” he said.

Books aren’t important now

Since November 9, buying a book has become what booksellers call “unnecessary” for many who have other pressing matters at hand, such as standing in endless queues at the bank in the hope of some cash. And often returning home with none. Doling out a couple of tenners for parking tickets has been causing much heartache, never mind a couple of hundreds for a book, which can easily be put off for a less tense time.

“Books are not a priority currently, and that has affected the mood in purchasing,” said Bose. “Of course, loyal readers will continue to buy their favourite authors’ new releases. But since most Indian fiction we publish is priced relatively low, between Rs 120 and Rs 200, it’s too small an amount for a customer to go through the whole process of paying with a card and entering bank details online.” This is why cash-on-delivery transactions are so popular with book-buyers, but at the moment those numbers have fallen for obvious reasons.

Online booksellers have tried to bounce back after freezing the COD option for a couple of days. “While we saw limited short-term impact due to the recent currency change announcement, we have already tremendous customer response in adopting electronic payment methods at delivery with 10x growth in electronic payments at the doorstep,” claimed an Amazon spokesperson on email. Perhaps. Still, Amazon reintroduced the COD option on November 11.

Even as book sales show some signs of limping back to earlier levels, booksellers are being cautious, expecting the recovery to take five or six months. “Though our customers are happy to pay with their cards, we are seeing fewer walk-ins, down by about 15%-20%,” said Mirza Afsar Baig of the popular bookstore Midlands in South Delhi. “Of those who are paying for books in cash, giving the balance back is an issue. Stock procurement has slowed. We are being more careful about how much and what we are acquiring.”

Some booksellers have even been considering buying smaller denominations of currency in the black market to keep business afloat. While bestsellers are continuing to do decent business, readers are being less experimental in picking books. “If regular readers were buying four books a month, now they are buying two, and telling themselves that they will save the rest for next month,” observed Arup Bose of Srishti.

At one of the largest second-hand bookstore in the country, Blossom Book House in Bangalore, a favourite with students and book-hounds, things are gradually turning around. “I saw more customers trickling in this week after the initial lull last month,” said owner Mayi Gowda. “If earlier we had 80%-85% customers paying for their purchases by card, now it’s climbed to 95%.”

The silver lining

Readers, say booksellers and publishers, are educated and better informed than the average citizen. So, they believe the impact of demonetisation won’t be long term. And as always in the world of business, resilience will probably pay off.

The publishing industry is gearing up to cope with a cash crunch at a number of book-centric events lined up for January 2017. “At the World Book Fair in Delhi from January 7-15, Srishti will be accepting e-wallet payments, which we haven’t done in the past,” said Bose. There is talk of installing mobile ATMs across various venues.

“This [policy] may be a short-term setback to the economy, publishing industry included, but as digital wallets and plastic money gain currency, not having enough cash in your pocket won’t be a factor in deciding about buying a book in the future,” noted Sharma of Bloomsbury. “Often one sees customers leaving without making a purchase as a lot of booksellers and publishers aren’t fully prepared to accept credit cards at book fairs. That’s set to change at the forthcoming fairs and lit fests.”

The biggest literary carnival of the year, the Jaipur Literature Festival 2017, will be a test of whether all the prepping is paying off. There are worries about connectivity for card payments at such events, which have often been seen in the past. As Christmas cheer mingles with tension and anxiety, some, like Sharma, are willing to see the glass half full. “A decline in the sales of pirated copies of books – at least for the next few months – will be a nice silver lining!”

We welcome your comments at letters@scroll.in.
Sponsored Content BY 

Behind the garb of wealth and success, white collar criminals are hiding in plain sight

Understanding the forces that motivate leaders to become fraudsters.

Most con artists are very easy to like; the ones that belong to the corporate society, even more so. The Jordan Belforts of the world are confident, sharp and can smooth-talk their way into convincing people to bend at their will. For years, Harshad Mehta, a practiced con-artist, employed all-of-the-above to earn the sobriquet “big bull” on Dalaal Street. In 1992, the stockbroker used the pump and dump technique, explained later, to falsely inflate the Sensex from 1,194 points to 4,467. It was only after the scam that journalist Sucheta Dalal, acting on a tip-off, broke the story exposing how he fraudulently dipped into the banking system to finance a boom that manipulated the stock market.

Play

In her book ‘The confidence game’, Maria Konnikova observes that con artists are expert storytellers - “When a story is plausible, we often assume it’s true.” Harshad Mehta’s story was an endearing rags-to-riches tale in which an insurance agent turned stockbroker flourished based on his skill and knowledge of the market. For years, he gave hope to marketmen that they too could one day live in a 15,000 sq.ft. posh apartment with a swimming pool in upmarket Worli.

One such marketman was Ketan Parekh who took over Dalaal Street after the arrest of Harshad Mehta. Ketan Parekh kept a low profile and broke character only to celebrate milestones such as reaching Rs. 100 crore in net worth, for which he threw a lavish bash with a star-studded guest-list to show off his wealth and connections. Ketan Parekh, a trainee in Harshad Mehta’s company, used the same infamous pump-and-dump scheme to make his riches. In that, he first used false bank documents to buy high stakes in shares that would inflate the stock prices of certain companies. The rise in stock prices lured in other institutional investors, further increasing the price of the stock. Once the price was high, Ketan dumped these stocks making huge profits and causing the stock market to take a tumble since it was propped up on misleading share prices. Ketan Parekh was later implicated in the 2001 securities scam and is serving a 14-years SEBI ban. The tactics employed by Harshad Mehta and Ketan Parekh were similar, in that they found a loophole in the system and took advantage of it to accumulate an obscene amount of wealth.

Play

Call it greed, addiction or smarts, the 1992 and 2001 Securities Scams, for the first time, revealed the magnitude of white collar crimes in India. To fill the gaps exposed through these scams, the Securities Laws Act 1995 widened SEBI’s jurisdiction and allowed it to regulate depositories, FIIs, venture capital funds and credit-rating agencies. SEBI further received greater autonomy to penalise capital market violations with a fine of Rs 10 lakhs.

Despite an empowered regulatory body, the next white-collar crime struck India’s capital market with a massive blow. In a confession letter, Ramalinga Raju, ex-chairman of Satyam Computers convicted of criminal conspiracy and financial fraud, disclosed that Satyam’s balance sheets were cooked up to show an excess of revenues amounting to Rs. 7,000 crore. This accounting fraud allowed the chairman to keep the share prices of the company high. The deception, once revealed to unsuspecting board members and shareholders, made the company’s stock prices crash, with the investors losing as much as Rs. 14,000 crores. The crash of India’s fourth largest software services company is often likened to the bankruptcy of Enron - both companies achieved dizzying heights but collapsed to the ground taking their shareholders with them. Ramalinga Raju wrote in his letter “it was like riding a tiger, not knowing how to get off without being eaten”, implying that even after the realisation of consequences of the crime, it was impossible for him to rectify it.

It is theorised that white-collar crimes like these are highly rationalised. The motivation for the crime can be linked to the strain theory developed by Robert K Merton who stated that society puts pressure on individuals to achieve socially accepted goals (the importance of money, social status etc.). Not having the means to achieve those goals leads individuals to commit crimes.

Take the case of the executive who spent nine years in McKinsey as managing director and thereafter on the corporate and non-profit boards of Goldman Sachs, Procter & Gamble, American Airlines, and Harvard Business School. Rajat Gupta was a figure of success. Furthermore, his commitment to philanthropy added an additional layer of credibility to his image. He created the American India Foundation which brought in millions of dollars in philanthropic contributions from NRIs to development programs across the country. Rajat Gupta’s descent started during the investigation on Raj Rajaratnam, a Sri-Lankan hedge fund manager accused of insider trading. Convicted for leaking confidential information about Warren Buffet’s sizeable investment plans for Goldman Sachs to Raj Rajaratnam, Rajat Gupta was found guilty of conspiracy and three counts of securities fraud. Safe to say, Mr. Gupta’s philanthropic work did not sway the jury.

Play

The people discussed above have one thing in common - each one of them was well respected and celebrated for their industry prowess and social standing, but got sucked down a path of non-violent crime. The question remains - Why are individuals at successful positions willing to risk it all? The book Why They Do It: Inside the mind of the White-Collar Criminal based on a research by Eugene Soltes reveals a startling insight. Soltes spoke to fifty white collar criminals to understand their motivations behind the crimes. Like most of us, Soltes expected the workings of a calculated and greedy mind behind the crimes, something that could separate them from regular people. However, the results were surprisingly unnerving. According to the research, most of the executives who committed crimes made decisions the way we all do–on the basis of their intuitions and gut feelings. They often didn’t realise the consequences of their action and got caught in the flow of making more money.

Play

The arena of white collar crimes is full of commanding players with large and complex personalities. Billions, starring Damien Lewis and Paul Giamatti, captures the undercurrents of Wall Street and delivers a high-octane ‘ruthless attorney vs wealthy kingpin’ drama. The show looks at the fine line between success and fraud in the stock market. Bobby Axelrod, the hedge fund kingpin, skilfully walks on this fine line like a tightrope walker, making it difficult for Chuck Rhoades, a US attorney, to build a case against him.

If financial drama is your thing, then block your weekend for Billions. You can catch it on Hotstar Premium, a platform that offers a wide collection of popular and Emmy-winning shows such as Game of Thrones, Modern Family and This Is Us, in addition to live sports coverage, and movies. To subscribe, click here.

This article was produced by the Scroll marketing team on behalf of Hotstar and not by the Scroll editorial team.