The Latest Big Brand to Plant Roots in India Is...
Aug 27th 2012 5:00PM
Updated Aug 27th 2012 5:04PM
At long last, India's 1.2 billion citizens will be able to download Fifty Shades of Grey from their very own Amazon.com (AMZN) Kindle store. The site was officially launched on Wednesday.
And if the good people of India prefer something a little more high-brow, there are also more than 1 million books immediately available for download, all conveniently priced in rupees.
Often Overshadowed by China, India Is Arguably the Place to Be
The new Amazon Kindle store will carry exclusive e-titles from popular Indian authors, and the country's independent authors and publishers will now have access to Kindle Direct Publishing. Amazon will sell the Kindles themselves through India's own retailing giant, Croma.
Of course, it's always flattering when a well-liked and well-respected business goes out of its way to cater to a country's particular needs and tastes. And while flattery can sometimes get you nowhere, other times it can get you everywhere; in this case, it's going to get Amazon.com onto the radar screens of 1.2 billion potential consumers.
This is good news for investors in the brand. It wasn't too long after Amazon's American launch that it brilliantly opened a U.K. and a German store, and this is an equally brilliant move into one of the world's biggest emerging markets.
True, India may not be quite as red-hot as it once was (nothing stays red hot forever; even China is slowing down), but it's a solidly liberal-democratic country with a bustling free-market economy and growing middle class that, over the long term, has nowhere to go but up.
The Smart Way to Get a Piece of Emerging-Market Action
And Amazon isn't the only quintessential American brand that's making its presence felt in India.
The smartest American companies are getting into India now (or have been in India for a while), offering American investors a slice of the emerging-market pie without the risk that can go along with opaque foreign companies that trade on opaque foreign stock exchanges. Just to name a few:
- Starbucks (SBUX) inked a deal with Tata Group, an Indian conglomerate that makes everything from steel to tea, earlier this year. Tata will act as Starbucks' guide around the subcontinent: a smart way to quickly learn how to operate in a foreign market.
- Getting the jump on just about everyone else, McDonald's (MCD) has been in India for 15 years now, operating more than 250 restaurants there and serving over 6.5 million customers daily.
- Yum! Brands (YUM), which operates American fast-food stalwarts such as KFC, Pizza Hut, and Taco Bell, has such a robust India business that in 2011, it spun off Yum! Restaurants India as its own separately reporting business. Yum! currently operates 200 KFC and 170 Pizza Hut restaurants in the country.
Everyone Wants to Rule the World, Including Amazon
Catering to India's population of 1.2 billion is an important step in continuing to lock down the world's e-book market, which Amazon already dominates. One estimate puts its share of the market at 60%, while the Kindle holds the title of world's best-selling e-reader for five years running.
As such, look for Amazon to try to make the move from India's premier e-book store to India's premier everything store sooner rather than later.
Today, Harry Potter. Tomorrow... anything else a consumer's heart desires.
John Grgurich is a regular contributor to The Motley Fool and owns no shares of any of the companies mentioned in this article. The Motley Fool owns shares of Amazon.com, Starbucks, and McDonald's. Motley Fool newsletter services have recommended buying shares of McDonald's, Starbucks, and Amazon.com, as well as writing covered calls on Starbucks.