In The Art of War, Sun Tzu tells us, “In the midst of chaos, there is also opportunity.” Approaching the publishing market in China, it can be hard to distinguish the opportunities from the chaos. We all know the impressive size of the market and its potential, but starting with the number 1.4 billion in mind can be daunting.
At Ingram we believe any publisher, large or small, can build a successful business in China. The key is developing a comprehensive and flexible strategy that considers the complexities of the market and uses them to your advantage.
The Chinese market can be easily segmented and approached by region. The population of Beijing is 26 million and the Pearl River Delta is home to 65.5 million people. As China’s growing middle class demands ever-increasing quantities of high-quality foreign content, the opportunity has never been greater for international publishers. And most of this key consumer group is located on China’s urban eastern seaboard. When embarking on a China strategy for your business, approaching these cities and regions individually allows you to focus on manageably sized markets and to create attainable short-term goals.
All books imported into China must go through one of China’s 40+ state-importers and pass an approval process. In 2012 alone China acquired a total of 16,115 book titles from abroad, according to statistics in China Publisher’s Yearbook. Of these, 4,944 were from the U.S., 2,581 from England, 2,006 from Japan 1,209 from Korea, 874 from Germany, and 835 from France.
With the connectivity and technology available today, getting content into China has never been simpler. And with the development of print-on-demand partnerships and e-book channels, Ingram is working to broaden the ways publishers can access readers in China.
The Retail Landscape
With both the retail and distribution sectors open to private business since 2001, the Chinese book retail industry is a dynamic force with expansive opportunities for international publishers.
The Xinhua group, China’s largest network of book retailers, is often misunderstood as a centrally state-run entity. In fact, Xinhua stores operate independently at a regional and provincial level. Xinhua owns 17 of China’s largest 20 bookstores with branches across the country, from megacities to the rural countryside.
Private bookstores are an integral part of China’s rich literary history, with some of them even considered sites of national cultural significance. You’d be amazed to see the crowds that converge every weekend on these landmark shops, which often contain cafes, restaurants, and social spaces for cultural activities.
With the rise of companies like Alibaba, China’s e-commerce industry has gained global attention for its tenacity and innovation. China’s online book business is no different, and companies like DangDang and JD.com continue to grow and capture impressive portions of the book market. China’s three largest book e-retailers account for 60% of online book sales.
The Digital Dragon
Digital publishing has been around since the early days of the Internet in China, and today more than 200 million people in China read digital publications. Looking even further ahead, Emarketer, a leading research firm on digital marketing, anticipates that more than half of China’s population will have a smartphone by 2018. Given these impressive figures, it is unsurprising that China’s digital publishing business reported year-on-year revenue growth of 40.5% in 2012.
It is not only the numbers that present a compelling picture of China’s digital book market. Online literature now boasts more than 10 years of history in China, and its cultural relevance should not be underestimated. In 2013, many online writers made the list of the country’s richest authors. Online literature plays an important role in the entertainment industry: popular works have been adapted to film, both television series and feature films, with very high ratings. In the past, readers accessed online literature and series via desktop computers, but now users are more likely to use mobile phones and tablets
It could be said that the Chinese consumer was ready for digital content before the publishing industry had any to sell. Although cellphones and tablets are the favored reading device, the e-book market is in its infancy. The majority of digital content available is still in html format and paid for per chapter or by a monthly subscription. Content is purchased on phones or tablets from the e-bookstores of China’s three cellular service providers, the largest being the China Mobile bookstore. Many popular online publishers began as platforms for fan fiction and have developed to encompass a broad array of digital imprints catering to a range of reading tastes. Many of China’s successful trade authors recently have made their names through these digital self-publishing platforms.
E-books are sold by a number of popular e-retailers in China, but the number of foreign titles readily available is still relatively small. With a consumer base already accustomed to reading on smart devices, there is growing demand for quality digital content. EPub 3 presents enticing opportunities, particularly in the education and textbook sectors, as parents and students seek an increasingly sophisticated and interactive reader experience.
Another remarkable trend in China’s digital publishing industry is the innovative use of social media marketing, which allows authors and publishers to reach a huge market, as well as offer highly personalized branding and social exchange. Weixin (WeChat) has more than 396 million active monthly users, and more than 100 publishers are already using the WeChat platform to launch new titles.
At Ingram, our goal is to build a bridge for publishers to a global content market without boundaries. China’s digital publishing industry has grown into a thriving and dynamic market, one we believe is still in its infancy. As the Chinese reader continues to drive the sector in innovative and exciting ways, we make it our business to secure a foothold in that growth. Who knows how far away we are from the first global bestselling Chinese e-book?
Shawn Morin is president & COO, Ingram Content Group.