Contents

Key players in the digital environmentOver the last decade, China saw the rise of many majoronline platforms for all domains of Internet-based communicationand ecommerce, including online search(www.Baidu.com); the trading platform Alibaba, which includesan online payment system (Alipay); and Yahoo! China(acquired in 2005); as well as—in the case of books—online retailers DangDang, Amazon, and Jingdong (www.360buy.com) (interview with Cheng Sanguo for this report).In recent years, all these platforms have—each in their respectivefield of action—engaged in aggressive price warsmotivated by very price-sensitive consumers; plus, theyhad to agree to the terms of the Chinese government’sstrict policy of control over any content, both domesticand from abroad, on sensitive political and social issues,banning unwanted websites, and very effectively discouragingdomestic content providers of any kind from referringto topics considered to be controversial (for a detailedaccount, see this study by Octavio Kulesz for the InternationalAlliance of Independent Publishers titled “DigitalPublishing in Developing Countries”).As for publishing, a premier role is being played by ChinaMobile, by far the country’s largest communications providerand a Fortune Global 500 company (ranked number87 in 2011), with 610 million subscribers as of June 2011and with 300 million mobile Internet users in 2012, a numberthat is expected to more than double by 2013. ChinaUnicom and China Telecom range second and third. In October2011, China Mobile started a new business modelcalled Yi Book Store. Customers can order books via mobilephone and—as an innovative approach to services—paycash on delivery. The China Mobile Portable Reading Platformholds a book collection of 300,000 titles (as of February2012). The accumulated amount of customer visitssince 2010 is said to be 300 million, reading 400 millionpages per day (information provided by China Mobile, atBIBF 2012).Although the ambitions of China Mobile to shape the entiredigital sector are huge, it has yet to be seen which sector,after the current transition period, will have the upperhand in defining the digital future. At this point, three anglescan be identified in this strategic competition: the(mobile) network providers, led by China Mobile; the manufacturersof hardware devices, notably Hanvon, but alsomost recently Huawei; and the content providers, whichinclude publishers as well as various online platforms.By summer 2011, it became clear that hardware manufacturersin particular were facing an increasingly tough economicenvironment. eReader manufacturer Hanvon reportedsignificant losses, and both Founder and Aigo announcedplans to stop production of ereaders altogether.The new competitive situation was brought about by pricewars for reading devices, especially since the spring of2011, as well as new platform competition from tablets—notably Apple’s iPad—and the major companies have reorientedtheir strategy by launching content-based ventures(source).Hanvon, founded in 1998, is thought to control an estimatedtwo-thirds of the markets for E Ink–based reading devices,claiming over 1 million units sold. In its own ebookshop, Hanvon claimed in March 2011 to have 130,000ebook titles available for download and to soon be expandingthat number to 200,000 titles (http://bit.ly/xWRyHn). In June 2011, Hanvon signed an agreement withShanda to gain access to Shanda’s ample list of online titleson its “Cloudy Bookstore.” Shanda’s own device, the Bambook,introduced in 2010, is assumed to come in second,at a low double-digit market share (http://bit.ly/zoCfes).Doukan (“All to see”), a proprietary reader sold by Dang-Dang, has gained a reputation of poor usability, resultingin growing popularity of the Kindle among Chinese consumers(interview with Cheng Sanguo).As Jon P. Fine declared on his second visit to China duringthe Beijing International Publishing Forum on August 28,he soon hopes to officially import Kindle devices to China.eBook distributioneBook distribution platforms of relevant size have alsobeen introduced by a number of publishing companies,such as www.Dajianet.com, launched by China PublishingGroup Corporation, one of the largest players in the Chinesepublishing industry.Reading as well as writing platforms, bundled with ebookdistribution to large user communities, have been introducedby several more popular portals, such as Sina.com,China’s huge infotainment portal and microblogging website(http://book.sina.com.cn).Domestic ebooks are most commonly published in CEB, orChina Ebook Format, promoted in particular by Apabi(founded in 2006), the former digital content division ofFounder Group, a major Chinese technology conglomerate.The CEB format has also been used by European andThe Global eBook Report 69