Entrepreneur Decode – The ‘Milk Van’ Library Model

Reading e-books is a fast-growing trend. But for many, the charm of reading a physical copy still remains. In a quest to find a library close to my residence in Mumbai, I stumbled upon a very innovative business idea, Just Books CLC.

I was greeted by a couple of ladies who seemed to be too young to be librarians.This was the cleanest library I’d ever visited. One could easily mistake it for a retail bookstore like Crosswords or Landmark. My curiosity for this new-age library chain forced me to engage into a conversation with the librarians and thus emerged the story of Just Books CLC.

Sundar Rajan, a software engineer from Bangalore started ‘Strata Retail & Technology Services Pvt. Ltd.’ a.k.a.  ‘Just Books CLC’ in May 2008 with a seed capital of Rs. 50 lakhs. In order to expand his business, Rajan considered the franchise model. To learn more about the franchise model, Rajan attended several conferences and discussions on the franchise system. At one such conference he met the members of the N.S. Raghavan Centre for Entrepreneurial Excellence (NSRCEL), an arm of the IIM, Bangalore, which helps aspiring entrepreneurs to give life their business plans. This interaction was a turning point in his journey to realize his dream of a library chain. (pic : JustBooks Blog)

Within the first three months of its inception, Just Books got 1000 members and in another three months the number grew up to 2000. As his chain grew Rajan convinced ten ex- colleagues from iFlex to leave their jobs and work at half their pay to build an ERP solution for running a library, and coupled it with RFID technology. These systems have helped Just Books grow from five libraries in May 2010 to thirty libraries across four cities by May 2011, with an inventory of over 3 lakh books and annual revenue of Rs 4 crores!

Just Books differentiates itself through their cutting-edge technology, that allows libraries to be integrated, so that members can borrow from one library and return books to another, and they can spend more time reading a book than searching for one.

Once 5000 members are registered in a city, a book warehouse is established in that city, which acts as a hub and helps in networking of the libraries. Rajan fondly calls this the ‘milk van model’. Books are collected in the evening and sorted out to be sent to the libraries in the morning. Currently, one warehouse is operational in Bangalore and another one is proposed to be commissioned between Mumbai and Pune to service both cities.

Most transactions – searching, issuing or returning can be done through a self-help kiosk using an ID card given to members. I must confess that I was initially intimidated by the kiosk. However, when I saw a 10-year old girl borrow her books using the kiosk, I realized that borrowing or returning books in this library is literally child’s play.

Just Books does not impose a time limit, thereby allowing borrowers to keep books for however long they want without fear of late fees. Members living within 7 kms of the library can have their books delivered and picked up at their home.

Each library works on a franchise model with a 50-50 ownership pattern. The franchisee looks after the procurement of space and day-to-day activities, while Just Books owns and operates the software. Franchisees can make Rs 70 thousand to 1 Lakh per month. Each Just Books library has approximately 10,000 books and is approximately 1200 to 1400 square feet in terms of floor space. However, there are smaller formats of 300-400 square feet which are almost the size of a living room in an apartment.

Just Books faces direct and indirect competition from retail stores, public and private libraries, road-side hawkers and not to forget the WORLD WIDE WEB where one can not only browse books but also download or purchase them online as e-books, paperbacks or audio-books.

However, these do not bother Rajan as it is forecasted by NSRCEL, that with their sizeable inventory of books, sturdy IT infrastructure, and innovative retail management techniques, Just Books will have more than 200 libraries in India in the next couple of years, reaching out to half a million homes. In the long run, Rajan aspires to convert his libraries into community centers and grow other businesses through them, such as holiday planning and developing a musical hub. But right now, the vision is to become the largest rental space for paperback books, with a mission ‘to get every book a reader and every reader a book’.

This blog post has been written by Anindya Mallick, Associate Insight Consultant – Data Mining, Brandscapes Worldwide. Anindya (pronounced Aunindo) is our Tagore spouting Bengali in the house.

Email – anindya.mallick@brand-scapes.com

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About Brandscapes Worldwide

Brandscapes specializes in marketing analytics and insight consulting for consumer goods, services and the retail sectors. We leverage the power of advanced data mining tools and the practical marketing and communication planning expertise to distil actionable marketing insights.
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3 Responses to Entrepreneur Decode – The ‘Milk Van’ Library Model

  1. Bhawana says:

    Nice post, Anindya! – I have visited ‘Just Books’ a couple of times and it is certainly a very interesting model. Your article triggered a few thoughts:
    1. Would research help them modify their stores to make it more suitable to the catchment (based on demographics, vernacular books, etc.)?
    2. They are already using kiosks – are there other new-tech options they can explore to attract tweens/ teens and make them Loyals over time?
    3. What workshops/ activities can drive people to reading hard copies over e-versions and other pass-times (games, etc.)? Would it help in generating higher revenue?
    4. How can they further enhance the reading experience of their customers?

  2. http://vimeo.com/35381937 … my love for libraries brought me to this link…

  3. Bhawana, I have been trying to frame answers to your questions but could not come up with an ideal answer to any… hence, here goes a WIP (:P) version …
    1. Yes of course… its not very different from any other line of business. Its different from other libraries as it is customer-centric. To maintain this differentiating factor, they shall need customer insights on a timely basis.
    2. They could link up with schools…. I don’t think any school has thought of outsourcing its library to a community library chain…. In my school, I remember, we used to have a library period when we were asked to form a line, quietly walk inside the library, pick a book based on a quick browse (5 minutes at max) and join another queue that went back to the class room. This exercise was boring. This could be replaced with an ‘outing to the library’ event that could be done even after school hours. This event could be co-hosted by the school and the library….
    3. I personally prefer reading a hard copy but hey! that’s just me. I think its time for us to think of hybrid offerings…. e.g. the pass-code to an Xbox 360 game could be in the meaning/essence of a chapter of an old English classic.
    4. I don’t have a good answer for this. I had asked this question to Mr. Sundar Rajan himself in an email. I am yet to get an answer.

    Thank you for the questions.

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