Why a big foreign book club went bust in China

By Wu Jiayin  |   2008-7-2  |     NEWSPAPER EDITION

Illustration by Zhou Tao More in cartoon gallery

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Besides, in the case of the Bertelsmann book club, the cost for maintaining the club is also huge. According to Shanghai Morning Post on June 22, Bertelsmann spends 4-5 million yuan (US$583,200-US$729,100) a year in advertising to recruit members. And sending free book lists to members every three months is even more expensive.

Despite these expenses and competition, "Bertelsmann's failure in China does not mean book clubs cannot achieve success in China,'' said Huang Yuhai, chairman, president and editor-in-chief of Shanghai 99 Readers' Culture Co Ltd, said in an interview with Shanghai Daily.

After four years, 99 Readers' Club ahas 1.5 million members and is expected to start making profits this year.

As to Bertelsmann's book club, Huang said that it has achieved great success in many foreign countries. Profits from its book clubs worldwide last year totaled US$100 million.

For example, in the United States, Bertelsmann created different book clubs to meet the tastes of readers. There are detective book clubs, military history book clubs, travel book clubs, and so on. Bertelsmann has more than 5 million club members in the US.

"Bertelsmann failed in China because it neglected to localize the book club according to the demands of Chinese customers when the company transplanted the book club into China,'' Huang pointed out.

Indeed, to many people, there is not much difference between the Bertelsmann book club and other traditional bookstores in China.

Feng also attributes Bertelsmann's failure to poor business operation rather than the challenge of online bookstores.

"Bertelsmann's way of doing business in China is too profit-oriented,'' he said.

Indeed, most recommended Bertelsmann book are the latest best-sellers, or so called "youth literature'' - targeting the young.

While this group is easily attracted, they are also apt to change tastes quickly as they mature.