Tablets and ebooks in China

TabletEBookChinaChina’s Shanda Literature Limited was established in July 2008 as a branch of Shanda Interactive Entertainment Limited. It currently owns three literature websites and holds about 80% of the market share in Chinese entertainment literature. Also under Shanda Literature was an online platform called “Yuncheng Bookstore”, or “Cloudary” as it is sometimes referred to by Western media. Mainly serving ebook readers, the platform’s name literally means “City of Books in the Clouds”.

It was recently revealed that as of March 2, 2013, Yuncheng Bookstore had received over 25 million paid orders and there were nearly 700,000 kinds of ebooks downloaded from the platform. These amazing figures had increased from those nearly three months ago — 20 million and 620,000, respectively, as of December 18, 2012 — indicating a 25-percent growth in paid orders and a 13-percent growth in the number of ebooks downloaded.

More importantly, Yuncheng Bookstore and Shanda’s famous e-reader Bambook recently teamed up to launch a series of products in Beijing. At the launch, it was announced that among Yuncheng Bookstore’s 16 million users, 62 percent use their mobile phones for reading, while 16 percent use dedicated e-reading devices. Only 12 percent use tablet computers to read.

Mobile phones (including smart phones) remain the most popular e-reading devices in China. However, it is worth noting that Chinese readers are increasingly shifting their focus from e-readers to tablets. Apple’s iPads as a high-end fancy product held 72 percent of the Chinese tablet market share by selling 1.7 million units during the three-month period ending July, 2012. As Ben Bajarin at Tech.pinions reported, the so-called “grey market tablets” are also spreading like fire.

The “grey market tablets”, according to Bajarin, are low-end Android products that are “basically stock with just a few simple apps pre-loaded”. Because these are “stripped of Google services because they are irrelevant in China”, those who buy them have to “download a local app store (or several) and customize them with the local services they choose”. The tablets are also incredibly cheap, selling at US$47 for a 7-inch and through to US$150 for a 10-inch. In comparison, iPad 2 and iPad 3 are selling at US$480 and US$544, respectively, in China in 2012.

It is estimated that toward the later half of 2012, these super cheap, locally made “grey market” Android tablets were selling nearly 20 million units per quarter in China. This is likely to be one reason why the profits of dedicated e-reading devices are disappearing — Hanwang Technology, the country’s number one e-reader maker, saw its annual sales income plummeted 22.36 percent in 2012 from the previous year.

This trend is even more significant in Taiwan — a survey conducted by Taiwan Digital Publishing Forum (TDPF) showed that nearly half (46.5 percent) of ebook readers read on their tablets, followed by smart phones (approximately 20 percent). While most of these readers own smart phones (more than 70 percent) and tablets (nearly 60 percent), only 1 percent own dedicated e-readers.

The good news is that according to the aforementioned announcement by Yuncheng Bookstore, a total of 77 percent of users said they are willing to pay for good digital content. A report by Xinhuanet.com also confirmed that China’s ebook industry has realized the importance of content. While hardware is necessary, it is more critical to establish professional platforms that deliver original and innovative ebooks (i.e. not just scanned images of paper-based books as what appears to be consumed as “ebooks” by the majority of Chinese readers).

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