Press
Jingdong (JD) wants to become the smartest, if not leading, online bookseller in China — and perhaps the rest of the world. JD is not new to e-commerce: It launched 1998 and is today one of China’s biggest online retailers with a growth rate three times higher than the industry average. JD has an approximate 25% market share of China’s consumer e-commerce purchases and takes in more than 500,000 orders per day. Over 50 million registered users can buy huge range of products, from bras and baking dishes to baby food and books.
Currently, Jingdong is in third place in online book and ebook sales, trailing market leader Dangdang.com (with approximately 29% and Amazon’s Chinese site, Z.cn with 27%, and Apple coming up fast). JD’s book revenue for 2012 was over 1 billion RMB ($160 million), but estimates suggest this will triple in 2013. Though JD is the third in sales, they boast the broadest title selection for print books, with 1.2 million print titles in its catalog, of which 200,000 are imported English-language title. Since the launch of its ebook shop last year, the company added 250,000 digital Chinese titles to its offering.
The ebook business, however, is off to a slow start with estimated revenue of 10 million RMB ($1.6 million) for 2013. Last Wednesday through Friday both Dangdang and Jingdong offered nearly all of their ebook titles for free, in an effort to boost interest as an alternative to piracy.
Jingdong’s Investment in Digital Content
Digital content is widely available in China, with a myriad of platforms offering movies, music and ebooks for free (often pirated copies) or at very low prices (many Amazon China titles sell for less than $1.60, with Chinese ebooks typically selling for 6 RMB, or less than a dollar). But as has been well documented, the potential for online sales remains astounding.
China is also said to be the word’s second largest book market in the world, with a value of 10.6 billion euros, according to the IPA.* It’s no wonder that the major online retailers — among them Dangdang and Amazon — are developing apps, shops and growing catalogues of ebooks.
The slow start to JD’s ebook business has not discouraged the company from investing in new platforms, looking to secure rights to digital content, and organizing new services related to the digital market. Part of the appeal to content and service providers is Jingdong’s famous customer service and ability to draw from its many years of experience selling online.
JD believes that selling digital content in the future will be resemble completely new market, one with its own rules and new formats, largely focusing on brevity and convenience. Shi Tao, vice president responsible for JD’s media business, explained: “People read on cell phones today. They want faster and shorter content than from a print book. It seems that the text length that readers feel comfortable with is dependent on the format of the screen.” JD just recently made exclusive deals with four well-known Chinese authors, who are going to write short fiction titles and sell them exclusively through the JD shop.
Jingdong’s Four Point Bookselling Strategy
1. Proprietary DRM: JD sees itself as an agent for the publishing industry, one that is sharing its profits with publishing houses. JD has signed agreements with the leading 200 publishers in China and developed its own DRM system — something that especially crucial in China, where pirated copies account for the majority of ebook downloads.
2. English-language Ebooks: As of March 2013, JD has also been offering some 3,000 English-language ebooks in its shop to cater to the many foreign professionals working in China, as well as the growing generation of young, educated and polyglot Chinese. Demand, in particular is rising for business titles and many of the English ebooks in JD’s shop are published by Wiley. These English titles have significantly higher price tags than Chinese ebooks.
3. Convenience and Customer Service: As noted, Jingdong is famous for its customer service. A large number of the company’s 30,000 employees work in logistics and service. If you place your book order before 11 a.m., JD will deliver your order the same day. JD also accepts cash on delivery, because many Chinese do not use credit or debit cards.
4. Device and Platform Agnostic: The other key element of JD’s customer-focused strategy involves delivering digital content to any device. JD offers apps for all mobile platforms. Mr. Shi dismisses the idea of launching platform-specific device: “It’s too late to launch a device that could unify the market. Besides, you can only lose money with hardware. Screen and battery are the crucial parts of those book-like devices and will be compared by the user with the ease of use of a printed book. But these two components are still unattractively underdeveloped.”
Rebranding for International Readers
Jingdong has just started a rebranding process by developing a new name and logo for its Chinese store. In addition, JD recently launched an English-language store, en.360buy.com, to reach customers all over the world. The company is also said to be preparing for a US IPO this year.
The changes and new strategy, say executives, all lead to the company reaching its ambitious goal of becoming “one of the world’s top five e-commerce companies.”
*Please note, the Chinese book market is said to be the second largest in the world, but few reliable statistics are available. We have sought, to the best of our ability, to seek out the best (albeit limited) information available.
On May 29-30, the Frankfurt Academy will host its second StoryDrive China conference in Beijing. The event offers an in depth exchange platform for international publishers and media experts looking to enter and learn more about the Chinese publishing marketplace.