Dangdang bides time before e-book plunge
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Dangdang has long been called "China's Amazon", with many analysts saying it follows in the footsteps of its American counterpart. Like Amazon, the 11-year-old Chinese company first came to the public's attention as an online bookseller. Similarly, in 2008 it partially shifted its focus to general merchandise. Now it shows aspirations of tapping into e-book services.
In early November, Dangdang set up a "Digital Publications Department" to research strategies for future e-book services. Li Guoqing, the company's co-president, personally took charge of the department, indicating its strategic importance.
Hugo Shong, founding general partner of IDG Capital Partners, an investor in many Chinese Internet companies, said Dangdang's expansion into e-books is inevitable.
"Dangdang has led Chinese online book sales since 1999, and it owns resources to win in that new market," Shong said.
Huang said the company intends to launch e-books for computers, cell phones and electronic readers, rather than marketing its e-reading device. Its longtime good relationship with Chinese publishing houses and large client pool will help, he said.
Since Nov 1, 360buy.com, China's biggest business to customer (B2C) company, has been expanding its online business from electronics to books, said Shi Tao, vice-president for book purchasing and sales at 360buy. The company has the goal of becoming China's No 1 online bookseller, according to Chinese media reports.
"360buy.com doesn't pose a great a threat to us. Dangdang has the upper hand in book variety and customer loyalty," Huang said.
Dangdang.com holds more than 50 percent of China's online book retailing market and has a 10 percent market share of the overall book market, a report by the Chinese consulting firm Analysys International has found.
But 360buy had a 34.5 percent market share of the overall Chinese B2C market, at the end of June, followed by Dangdang with 9 percent and Joyo.com with 8.8 percent, according to the China e-Business Research Center. Amazon bought Joyo.com in 2004 for $75 million.
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