Bertelsmann Sets Up Chinese Publishing Joint
Venture
Bertelsmann, the German publishing giant, announced that
it would create China's first Chinese-foreign book retailing
joint venture by taking a 40 percent stake in a local
chain, 21st Century Book Chain. Bertelsmann unit DirectGroup
would make the investment, but declined to say the amount
it paid for the 40 percent stake in the Chinese retailer,
which is owned by owner and chairman Luo Ruiren.
Bertelsmann said that it would close the largest of the
chain's 20 stores, and the smaller ones would be remodelled
into Club Centers that would offer only 150 - 200 of the
leading titles published each quarter by Bertelsmann's
six-year old book club operation in China.
Newly opened stores would use the same model, aiming
to stock mainly bestsellers and sell them at a 10-40 percent
discount compared to other booksellers.
Bertelsmann's China book club already claims around 1.5
million members and six Club Centers, and also runs an
online book shop, www.bol.com.cn. The leader in online
retail book sales is Dangdang.com.
Beginning in 2006, foreign companies will be allowed
to take majority ownership in retailing and distribution.
The foreign ownership clause was introduced as part of
China's accession terms to the World Trade Organization
(WTO) in 2001. Bertelsmann has said that it will consider
raising its stake after 2006.
The Chinese government has moved to shut down more than
600 Communist party-owned papers in the past six months
as part of its media liberalization policy. Their main
problem was that nobody wanted to read them, and they
were not able to draw advertising. For the most part,
these papers and publications were maintained by subscriptions
from local government organizations. When the government
removed the requirement that these organizations had to
subscribe to them, and stopped subsidizing them, they
had no choice except to shut down their operations and
lay off their staff.
As the media environment has changed, government-owned
bookshops have shed their boring image, and now display
and advertise leading bestsellers. More and more, Chinese
reading habits are drawing closer to those in Europe,
Japan and North America. The only difference with the
main markets is that the Chinese tend to read much more
per person annually. Having lived in a society which was
largely closed until recently, Chinese tend to be much
more curious about the outside world than their counterparts
in the United States. An important source for information
are books, which Chinese think offers much more detailed
information and analysis than television.
While there are almost no taboos, direct criticism of
government policy is still not allowed. The Chinese edition
of Hillary Clinton's memoir was a best-seller, but did
not include her critical comments about Chinese internal
and foreign policy found in the original edition. The
unauthorized change brought direct criticism from the
author, Hillary Clinton.
Before you go, did you like this article?
If so, you can receive a free email newsletter version
each weekday. Sign up using the China Business Express
form on this page.
