DATE=4/27/2000
TYPE=BACKGROUND REPORT
TITLE=CHINA INTERNET - E-COMMERCE
NUMBER=5-46208
BYLINE=STEPHANIE MANN
DATELINE=WASHINGTON
INTERNET=YES
CONTENT=
VOICED AT:
/// EDS: THIS IS THE THIRD OF FOUR REPORTS ON
THE INTERNET IN CHINA. THE FIRST TWO REPORTS
WERE ISSUED WEDNESDAY AS 5-46200 AND 5-46201. ///
INTRO: The Chinese government sees commerce on the
Internet as an important new part of the country's
economy. Top officials are reportedly considering
preferential tax treatment for online e-commerce
transactions. Correspondent Stephanie Mann recently
visited the Beijing offices of a company that is
selling Chinese-language books online and has set high
goals for its future.
TEXT: Company co-president Peggy Yu wants to do for
China what Amazon.com [amazon-dot-com] has done for
the United States - offer readers a convenient way to
purchase any books they want.
Ms. Yu and a partner (Li Guoqing) started the company
Science and Culture Book Infotech in 1997, and began
selling books last November at its Internet website,
Dangdang.com.
Peggy Yu says she is an avid reader. And when she was
studying and working in New York City in the late
1980's and early 1990's, she enjoyed shopping at book
superstores (such as Barnes & Noble) as well as at
neighborhood book shops. She got the idea for her
Internet bookstore after she returned home to Beijing
in 1997.
/// YU ACT ONE ///
I looked around China and I (saw), you know,
there are no superstores in China. Most stores
are so poorly stocked. ... And I felt readers in
China were so poorly served, and I wanted to do
something about it. ... And I think the Internet
is the best thing.
/// END ACT ///
So, Ms. Yu decided to use her education, a business
degree from New York University, and her experience,
as a consultant on mergers and acquisitions, to set up
an Internet bookstore. In addition to her own
investment, initial funding for the company came from
a Boston-based venture capital firm and a European
company that specializes in publishing concerns in
formerly socialist countries.
// OPT // Before Dangdang.com could start selling
books, the company had to spend two years establishing
a database of all the books that were available --
something that retailers in the West take for granted
but which previously did not exist in China. // END
OPT //
Ms. Yu says her e-commerce company is not yet making a
profit, but she has high hopes.
/// YU ACT TWO ///
We started sales in November, and our growth
rate has been very encouraging. It's about 30
percent monthly growth rate ... and we are doing
very well. In terms of profit, since we have to
spend a lot of money on infrastructure,
technology and we begin to spend money on
marketing, so we haven't turned a profit yet.
But I think the prospect for profit looks very
good, because Dangdang has a very solid business
model and has a good growth margin.
/// END ACT ///
Peggy Yu says Dangdang wants to provide the largest
choice of Chinese-language books to its customers. So
far, she says, the most popular categories have been
computer books and English-language learning books.
She says there is also a great interest in science
books - such as chemistry and veterinary medicine - as
well as books on tourism.
Orders come from major Chinese cities and from remote
counties, including villages in Tibet and Xinjiang --
places Ms. Yu says she was surprised to learn that
people even have access to the Internet. She says
Dangdang has also received orders from Chinese people
living in Paris and Poland, even though the company
has not advertised overseas.
Now, Dangdang sells only books published in China, but
Ms. Yu says she hopes soon to be able to offer books
published elsewhere.
/// BEGIN OPT ///
/// YU ACT THREE ///
I really want to offer what Amazon is offering
Americans, to the Chinese. I want to offer
three-million English titles in China, and I'm
actually working on that with suppliers in the
States and in the U-K [United Kingdom].
/// END ACT ///
On a recent workday, the Dangdang.com office on the
north side of Beijing was busy with young employees
processing orders and updating the website listings.
The marketing director had just been hired away from
Microsoft-China and was preparing to train another
group of new employees. Ms. Yu says the company has
about 80 or 90 employees, but the number keeps
changing because more come on board each week.
Conducting e-commerce is more cumbersome in China than
in many other countries. First, Chinese banks do not
speedily process electronic funds transfers, and many
people do not have credit cards. Therefore, Ms. Yu
says her company accepts four different methods of
payment. Secondly, China does not have nationwide
express-delivery companies, so Ms. Yu relies on the
postal system and bicycle delivery boys.
/// END OPT ///
Ms. Yu says there are some other online Chinese
language bookstores, but she does not see them as
competitors to Dangdang.com.
/// YU ACT FOUR ///
Because, number one, we are definitely the category
leader. And we have the largest selection of titles,
either online or off-line. ... And we look at other
websites. Some of them, I call them online
bookstands. They have very few titles, maybe 10 [or]
12 titles, or a couple hundred titles. ... And then
there are other companies that just put a certain type
of book information online and they don't have [a]
function to sell books.
/// END ACT ///
Ms. Yu says people recognize Dangdang.com as the
online bookstore of Chinese language titles, and she
hopes to keep it that way. In fact, the name of the
website comes from the Chinese phrase "xiang dang
dang," which means "everybody knows your name."
(Signed)
NEB/SMN/KL/WTW
27-Apr-2000 11:40 AM EDT (27-Apr-2000 1540 UTC)
NNNN
Source: Voice of America
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