Amazon's Kindle likely to fizzle in Chinese market

By Adam Skuse Source:Global Times Published: 2013-5-9 22:28:01

Amazon opened its Chinese mainland Android app store last week, becoming the first Western company to offer paid-for Android apps in China - something even Android's creator, Google, does not yet do.

This is the latest in a line of moves that indicate Amazon is prepping to release its Kindle range of tablets and e-readers in the country. Other signs have included the launch of its Kindle store at the end of last year - which allows Kindle-format books to be purchased and read with Amazon's app for tablets and phones - as well as the launch of its cloud storage service in China. The company has already received regulatory approval to release some of its Kindle devices.

However, while the Kindle has been a runaway success in the West, where it helped define the way e-books are now bought and sold, it will not have the same catalytic impact on China's e-book market.

The popularity of e-books in China is not in question, with digital publisher revenues growing 31 percent in 2011 to 137.79 billion yuan ($22.45 billion), according to government figures, and nearly 200 million people regularly reading online literature in 2012.

But while Amazon's Kindle helped make e-books mainstream and pioneered a new business model for online publishing in the West when launched in 2007, similar feats are just not possible now in China. Companies such as Shanda and Dangdang have had their own e-book readers and stores for years. They have better recognition in China, and better links with local publishers and regulators.  

The Kindle's success in the West was also due to Amazon's dominance and name recognition in e-commerce, something it lacks in China, where it holds less than a 3 percent market share.

Moreover, dedicated e-book readers look to be on the way out, with even home-grown devices such as those offered by local market leader Hanwang losing ground to tablets. At the same time, smartphones remain the overwhelmingly preferred choice for e-book reading in China.

While Kindle's Android-based Fire offers a tablet experience, its success was largely due to a combination of brand recognition and low pricing. Since its debut, however, competition in the low- and mid-range Android tablet market has intensified greatly. Meanwhile, Amazon doesn't have the same cachet as Apple or Samsung to make users choose it over cheaper competition.

Then there's the economics. Amazon sells Kindles as a loss leader in the West, seeing the devices as a way to lock-in consumers to its proprietary e-book format and other content, through which it can earn long-term profits. There are two reasons this won't work in China: the aforementioned lack of contacts with local publishers, as well as the unwillingness of Chinese consumers to pay more than a few cents for e-books.

While it is a good idea for Amazon to get in on the e-book market in China, the Kindle itself will not play the same sort of vanguard role here that it did in the West. Rather, it will be down to the content and pricing of its online book store.

The author is a freelance writer based in Shanghai. Adam.skuse@yahoo.com



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