Before exporting to any market, it’s important to gain an understanding about the book distribution and retail practices. China is no exception, and today we bring you some valuable insights from publishing experts Robert E. Baensch and Xiaojuan Jiang on book distribution and retail sales in China.
It is important to understand wholesale and retail book distribution channels in China before focusing on the sale of English and other foreign-language books. There has been a long history of state-owned bookstores that were established as wholesale and retail bookstores under the Xinhua Bookstores name. Founded by the Communist Party of China in 1952, all of the Xinhua Bookstore branches were originally subsidiaries of the Xinhua General Bookstore in Beijing and identified by the name of the province in which they operated. Beginning in the 1980s, the branches served as independent business units and were no longer subsidiaries of the Xinhua General Bookstore in Beijing. In January 2003, more than 3,000 Xinhua Bookstores branches formed the China Xinhua Bookstore Association.
A change in government regulations on May 1, 2003, made it possible to organize and run privately owned bookstores, including investments from outside of China. Today, government- or state-owned bookstores are identified as the Primary Channel and the new private enterprise booksellers and distributors are identified as the Secondary Channel. It is this new category that allowed Bertelsmann to acquire the 21st Century Book Chain Company, though it ceased operations in July 2008.
Foreign-language books are sold in special sections of the Xinhua superstores and by “foreign language” bookstores in the 10 major cities along the coast of China. Although the English language is the primary language for sales, books in Japanese, German, French, Russian, and other languages are also sold in these specialized stores. These stores sell not only literature published in these foreign countries, but also the textbooks and learning materials to study the respective languages of these countries. English-language titles generate the largest percentage of foreign-language books sold.
Regional distributors are just beginning to develop in China. There are 25 major book logistics centres, including 20 provincial Xinhua distribution centres, three of which belong to publishing groups and two that are members of municipal Xinhua Faxing Groups. The three largest are Beijing Publications Distribution Center (250,000 square metres), Henan Provincial Xinhua Bookstore Distribution Center (96,400 square metres), and the Jiangsu Xinhua Bookstore Group (80,000 square metres). Three logistics centres were established to help move the book business beyond the major cities located along the coast. It is interesting to note that Taiwan and other foreign distribution companies have entered into the logistics business of China’s mainland via joint ventures. For example, the Century/Qiuyu Distribution Co., Ltd. is a joint venture between Shanghai Century Publishing Group and Taiwan Qiuyu Fulfillment and Distribution Company.
The total retail sales of brick-and-mortar bookstores over the past three years amounted to US$11.5 billion in 2012, US$11.9 billion in 2013, and US$12.5 billion in 2014. These numbers reflect the combined competition of online book sales and the rapid growth of active mobile social media users.
Online Bookselling
Another important aspect of the publishing sector is the rapid development of e-commerce. In the past two years, three major companies have been largely responsible for the expansion of the online bookselling market in China. In 2014, 63% of retail sales in the Chinese book market were generated by brick-and-mortar bookstores, whereas online bookstores accounted for 37%. The lead online bookseller is Dangdang, with a 44.2% market share. With over 15 million users, and more than 200,000 e-book titles available, Dangdang sold over 66 million books in 2014. Jingdong, otherwise known as JD.com, holds the second largest market share at 18.2%. Amazon follows third at 15.9%; however, its influence is growing quickly, helped by the company’s global brand, its international experience, and its growing understanding of the Chinese market. In 2014, Amazon China listed 240,000 print book titles, of which only 8,013 titles were available in e-book format.
JD.com, the second largest online retailer in China, provides an active online marketplace for a wide array of products, including home appliances, digital communication services, computers, household items, clothing, accessories, books, and food, among many others. JD.com has approximately 38,000 merchants or businesses whose products they sell online. With more than 60 million registered users and thousands of suppliers across the country, Jingdong offers millions of high-quality brands. In 2015 alone, it had more than 100 million visitors to its website and processed more than 500,000 orders per day.
These three leaders have expanded their e-commerce offerings from books to a wide range of consumer products. The balance of the online bookselling business is shared by Jing Dong Mall, which also sells videos and music products; the Dangdang Online Bookstore; and publishers that have established their own online sales operations.
Stay tuned for more from our blog series on the Chinese book market featuring excerpts from our latest report Selling Canadian Books and Translation Rights in China. Can’t wait? You can download the full report!
11/30/2016 | Export, Market Guides