Book sellers looking to net buyers

Updated: 2011-11-05 08:26

By Tang Zhihao (China Daily)

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SHANGHAI - China's large online book retailers are mounting heavy promotions to boost sales, and experts said it might be a strategy for companies to expand their customer bases and boost sales in other categories.

Suning.com, controlled by the Nanjing-based home-appliance retailer Suning Appliance Company Ltd, launched an online retail book channel on Oct 31. Customers are issued with coupons to the value of their purchase - or to a maximum 300 yuan if the purchase price exceeds that figure - and can use the coupons to purchase other goods from the company's online store.

Moreover, discounts of as much as 85 percent are being offered on some books. Suning said that more than 70,000 volumes were sold on the opening day and sales have been increasing rapidly since.

"It is a way for us to increase brand awareness in the online book-retailing sector. All the costs will be absorbed by Suning without transferring the burden to the publishers," said Li Bin of Suning.com.

The Nasdaq-lised E-Commerce China Dangdang Inc is also offering consumers coupons worth 200 yuan when they spend 100 yuan, or 200 yuan for a 400 yuan purchase, between Nov 1 and Nov 4. The company said the promotion is a celebration of its 12th anniversary.

Meanwhile, the Beijing-based 360buy.com, which specializes in electronic products and home appliances, is holding a similar promotion to celebrate the first anniversary of the launch of its online book-retailing unit.

The sector has boomed in recent years, registering combined sales revenue of 2.1 billion yuan in the third quarter, an increase of 79 percent from the same period in 2010, according to the research company, Analysys International.

In the second quarter of this year, Dangdang occupied 28.1 percent of the market for online book sales, while Amazon took 25 percent and 360buy.com 4.7 percent. However, competition is heating up as an increasing number of online traders join the sector. The entry of Suning.com and 360buy.com has further intensified competition.

Offering large discounts to attract consumers is a key customer-retention strategy adopted by companies, but some industry observers doubt whether the retailers will be able to make a profit.

However, analysts said the companies mount these heavy promotions in order to attract consumers and boost sales in other categories.

"Suning and some others online stores are obviously using their book-retailing channels to broaden their customer bases, and also increase sales in the home-appliance sector," said Liu Guangwu, an analyst with Analysys International.

Zhang Kun and Chen Limin contributed to this story.