Sainsbury’s acquisition of HMV’s stake in Anobii has thrown the spotlight on the e-book market. Retail Week takes a look

Why are we talking about it now?

Sainsbury’s today bought a 64% stake in Anobii – an online platform which allows users to share book reviews using social networking as well as purchase ebooks – from HMV for £1. The move is part of a wider strategy by Sainsbury’s to strengthen its entertainment offer while HMV is looking to focus on its core store business. It follows Waterstones’ decision to enter the market last month with a tie-up with Amazon to sell its Kindle.

What are the opportunities in the market?

Ebook sales in the UK surged 366% last year, according to research from the Publishers Association’s Statistics Yearbook. This is in stark contrast to physical sales, which fell by 7% in 2011. Amazon has streaked ahead in the market as its Kindle has become synonymous with e-readers in the same way that the iPod became the market leader in the MP3 player category a decade ago. Last year Amazon reported Kindle ebook sales had overtaken its sales of physical books for the first time.

Which other retailers are in the market?

WH Smith’s has partnered with Canadian e-reader maker Kobo and the alliance appears to be going well, with plans to open 100 Kobo-branded concessions in stores. Waterstones’ tie-up with the Kindle surprised the market but managing director James Daunt argues the retailer had to act fast and could no longer ignore the trend towards digital books. Earlier this year US  bookseller Barnes and Noble revealed plans to team up with Microsoft in a £185m deal to make The Nook, the retailer’s e-reader, available to millions of people.

What does the Sainsbury’s deal mean for the market?

Following the Sainsbury’s, WH Smith and Waterstones tie-ups, it is likely that other retailers will follow suit and partner with ebook providers. However, Conlumino retail consultant Matt Piner believes other grocers should think carefully before entering the market. He says: “At this point it is not essential for the grocers as their model has always relied on impulse purchases of bestsellers and leveraging strong footfall. E-books are not the same model and retailers need to look at whether it’s really worth it.”