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In China, a Major Battle Between Publishers and Big Tech

In China, a Major Battle Between Publishers and Big Tech

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In an industry first, dozens of publishing houses have announced they will boycott e-commerce platform JD.com’s “618” shopping festival.

A major power struggle has erupted in China’s book market this week, with dozens of publishers announcing a boycott of e-commerce platform JD.com’s upcoming “618” shopping festival over the tech company’s aggressive pricing policies.

China’s big tech companies have long held enormous leverage over the publishing industry, as e-commerce accounts for an estimated 88% of book sales in the country. This has enabled platforms like JD.com to force publishers to offer heavy discounts on their titles in order to take part in major online shopping events.

But many publishers appear to have drawn the line ahead of “618” — China’s second-largest shopping festival of the year, which takes place on June 18 — as they argue that JD.com’s latest sales strategy will make it impossible for them to make money.

In recent days, two major publishing groups have issued statements announcing a boycott of JD.com’s “618” festival. Together, these groups — which are based in Shanghai and Beijing, respectively — represent over 50 different publishing houses, including many of the industry’s largest players.

“We understand that the decision may cause inconvenience, but to maintain the long-term sustainable development of the market, we believe this is a necessary measure,” the Beijing-based group wrote in its statement.

Both groups said they were withdrawing from JD.com’s “618” sales event in protest at the platform’s insistence that publishers offer discounts ranging from 70% to 80% on all their titles throughout the eight-day promotional period.

According to publishing industry insiders, this policy would effectively force publishers to sell books at below cost. The publishers would bear the loss themselves, as in China publishers often sell books directly via e-commerce platforms rather than selling to e-commerce companies.

Publishers appear to be particularly frustrated by JD.com’s insistence that the discounts apply to every title in their collection, leaving them no ability to mitigate their losses.

“It’s treating books as a gateway for traffic and sacrificing the profits of the entire book industry,” one industry insider told Shanghai-based media outlet The Paper.

None of the Beijing-based publishers listed in the statement responded to Sixth Tone’s request for comment. Sixth Tone’s phone call to the Shanghai Publishing and Management Association went unanswered. JD.com also did not respond to requests for comment.

The standoff comes amid a tough period for China’s book market. Book sales peaked at 102.3 billion yuan ($14.3 billion) in 2019, but since then the market has declined, with sales totaling 91.2 billion yuan last year.

Tension between publishers and e-commerce platforms including JD.com, Amazon, and Dangdang.com have been building for years. The dominance of e-commerce in China, as well as the numerous shopping festivals where retailers are expected to offer massive discounts, makes the relationship especially fraught.

According to The Paper, e-commerce platforms routinely insist that publishers sell books for just 40% of their normal retail price during major shopping festivals. Publishers have tried to cope by raising their retail prices — with new book prices rising 70% between 2012 and 2022 — but profit margins remain tight.

In 2011, 24 publishing agencies called out JD.com for unfair practices after the company launched a promotion offering discounts of up to 60% on 50,000 children’s book titles. Two years later, a similar controversy erupted, with eight publishers threatening to boycott e-commerce platforms that tried to force them to sell books at below cost.

Publishers have also expressed unease over extreme price-cutting practices in China’s emerging livestream e-commerce sector. In 2021, a top livestreamer sold 80 million yuan of books in a single sales event, but hundreds of thousands of the titles sold were priced at under 10 yuan.

At the end of last year, New Oriental, the private tutoring-turned-livestreaming company, also attracted criticism from publishers after launching a campaign that gave away books for just 1 yuan in a livestream.

(Header image: JD.com staff pack books for shipment at a warehouse in Kunshan, Jiangsu province, June 8, 2023. VCG)


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