Wither Malaysian book industry

I was in Singapore on Monday, having lunch with some book industry people when the conversation inevitably turned to, surprise, books. What the hell is going on in Malaysia? Some said there is a warehouse sale every month. Others said there is one almost every other week. There are warehouse sales in Singapore but not like this.

The consensus was that whatever is happening does not bode well for the industry. But it is the industry that is doing it to itself! They are all eating from the same bowl what? And the bowl is only so big (or small).

As described by one of the book dealers during the lunch, "Warehouse sales are like steroid injections." How true. They solve the short-term problem of cash flow ... but the long-term side effects are less predictable. He said, "They can net about 200,000 in a warehouse sale, which will take them three months to make at the shops." I cannot be certain about that, but warehouse sales are about cash flow, or the lack of it. Warehouse sales used to be held once or twice a year for getting rid of old stock, a reasonably healthy situation. "Raman, what do you want me to do with all that old stock?" one CEO of a major book-chain said. True. No one is arguing with that. What the industry is grumbling about is that there is one practically every month (or, according to some, more often even than that), with brand new books being offered at huge discounts as loss leaders to attract customers, and with remaindered books brought in pallet-loads from Singapore, Australia, the UK and the US (in a practice known as dumping which is, probably, illegal in those countries). More than one book buyer has confessed that she would rather wait for the next sale. Besides once they have used up their budget for the month ...

From the conversation around the table one can see that the industry is jittery, very jittery. They know that this cannot go on, yet they are powerless and clueless to stop it. Everyone is accusing the others of spoiling the market. Meanwhile, they all join in the cannibal feast, oblivious of (or blinkering out) the potentially disastrous long-term effects. There could be a spectacular meltdown. (Singapore saw a relatively minor correction in 2000/2001, and in more recent times, Borders has had to exit the UK, unable to take the heat, and Waterstones is also, reportedly, consolidating.) One thing is for sure, Malaysian businesses don't learn from history, and they think it is only the 'other guy' who will fall. But all it takes is for one player to collapse, millions of ringgit worth of books will be returned to the distributors, dumping will take place every where, retail will slump, and ... There are only so many tom yam soup shops that can be set up in any city.

(Strangely, call it wishful thinking if you like, I think the independent niche player, especially those who add value in various ways, who have their loyal band of customers/clients, and who differentiate their products and services, will probably survive provided they stop moping and are quick off their feet. The big chains, for the large part, all sell the exactly same stuff with only superficial - and often sad- attempts at differentiation.)

The customer is obviously happy with the situation, and why not? Cheap books. Enjoy it while it lasts. I believe the next sale will be coming your way soon.