Online retailers go head-to-head

It would have cost you as much as 70 yuan ($11) to watch the romantic blockbuster Love Is Not Blind on Valentine's Day at movie theatres in Beijing.

If you liked the film, it would be acceptable to pay an additional 25 yuan to keep a copy the book on which it was based - the best-selling novel Grow Through Pain - written by Chinese female novelist Bao Jingjing.

Yet the Chinese e-commerce websites are offering a better deal: 2.5 yuan for a digital copy of the book, cheaper than a can of Sprite at the cinema.

The country's e-book industry has become the latest battlefield for the nation's top online retail giants while most publishers and industry insiders are playing wait and see.

On Feb 20, 360buy Jingdong Mall, the nation's No 2 e-commerce website by sales, announced it was launching an e-book retail platform, selling novels, magazines and multi-media books in digital form.

"We planned to sell e-books ever since the company decided to sell paper books years ago," said Liu Qiangdong, chief executive officer of 360buy.

Liu's company acquired the sales rights of the e-books from the book publishers, and 360buy will split the revenue with them. According to Shi Tao, vice-president of the company, 60 to 70 percent of the revenue will be taken by publishers.

However, most Chinese publishers have not decided whether to embrace the Internet, and those who did participate in online businesses are complaining about the e-commerce websites' low-price marketing strategy.

"The average price of e-books in the United States is 5 percent to 30 percent lower than paper books, but the e-books selling in China are 75 percent lower than the paper copies," Beijing News reported, citing Bai Bing, chief editor of Jieli Press, who publishes children's and teenager's books.

Most e-books selling on 360buy.com cost less than 10 yuan. Buyers can download the book on at most four different devices, including personal computers and smart phones operating the Android system.

Bai's opinion was echoed by bigger publishers.

"The key issue for the publishers is that they have to control the pricing rights of e-books," said Li Yongqiang, head of the China Renmin University Press Co Ltd.

Although Chinese information technology companies such as Hanvon Technology Co Ltd, Shanda Interactive Entertainment Ltd and telecommunications giant China Mobile Ltd have launched their own e-book schemes, analysts say the industry remains small in China.

"The nation's e-book business is still in its infancy, and the type of books available need to be diversified," said Sun Peilin, an analyst at Beijing-based Internet research company Analysys International.

The turnover of the book and audio-visual publishing sector was only 3 percent of the total turnover of China's online shopping market, said a report released by iResearch Inc.

The number of e-books available totaled 80,000 on 360buy.com, according to Shi from 360buy. It will increase the number to 300,000 by the end of this year, he said.

In addition, e-commerce group China Dangdang Inc, one of the earliest entrants into the e-book business and the owner of business-to-business portal dangdang.com, planned to add about 100,000 new e-books despite its lower-than-expected financial results.

Dangdang made a net loss of 129.8 million yuan in the fourth quarter of last year because of a gross profit decline and a jump in marketing expenses, according to the company's financial report released on Feb 23.

The digitalization of China's publishing industry is just a matter of time. As the country's leading online book store, Dangdang will definitely not sit and watch its competitors take over the market, Yi Wenfei, vice-president of Dangdang, told reporters in late 2011.