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securities times reporter wu zhi

in june 2022, anchor dong yuhui recommended the famous work "the right bank of the ergun river" by writer chi zijian in the live broadcast room, and readers immediately snapped up the book. in the following year and more, the cumulative sales of the book soared to more than 5 million copies. before the live broadcast, this work, which had been published for many years, had only been printed for a total of 600,000 copies.

the right bank of the ergun river is not the only book that has become popular in the live broadcast room. in recent years, the book retail channel has undergone drastic changes. among the main sales scenarios, physical bookstores have long been declining, and the share of traditional e-commerce has also been shrinking. short video e-commerce is almost the only retail channel that is still growing rapidly.

according to a report released by industry research institution zhongjin yiyun, in the first half of this year, the proportion of book retail sales (total price of all books) through short video e-commerce channels has risen to 33.89%, which has a significant impact on the book retail market. however, facing the short video e-commerce that competes on traffic and price, the publishing industry, which has long entered the era of small profits, seems to have a "complex mentality".

short video e-commerce sells 1/3 of books

in the past two years, the overall book retail market has been in a downward trend, and this trend continued in the first half of this year. according to a report released by beijing kaijuan, an industry research institution, the overall book retail market will still show negative growth in the first half of 2024, with sales falling by 6.2% year-on-year.

the "paper book market analysis report in the first half of 2024" released by cicc yiyun also shows that the book market sales in the first half of 2024 reached 51.812 billion yuan (excluding non-market textbooks and teaching aids data), a year-on-year decrease of 14.8%; the number of books in active sales was 1.0532 million, a decrease of 8.44% from the same period last year.

as the overall market is declining, retail channels are also changing significantly. at present, the main channels for book retail include physical stores, traditional e-commerce, and short video e-commerce. in the early years, under the impact of e-commerce platforms, the share of physical stores declined significantly; in recent years, under the influence of short video e-commerce, the retail share of traditional e-commerce has also continued to shrink.

"in the past two years, we have also felt that the changes in book retail channels are very obvious. as far as china library network is concerned, our traditional e-commerce has been declining in the past two years, but our new channel, short video e-commerce, has been growing." huang ping, founder of china library network, told a securities times reporter.

according to the cicc yiyun report, in the first half of this year, the sales of traditional e-commerce, physical retail, group purchases, and store distribution all declined year-on-year, with traditional e-commerce and physical retail sales declining by 26.98% and 19.05% year-on-year respectively. short video e-commerce has become the only channel with positive growth. although the growth rate has slowed down compared with the past, it still reached 18.63% year-on-year.

with the "one rise and one fall", in the first half of the year, the retail sales of books accounted for only about 7% of the total, and the market share of traditional e-commerce also shrank to 48.85%. short video e-commerce has continued to take over the market lost by traditional e-commerce, and its retail sales accounted for 33.89%, firmly becoming the second largest book retail channel. this means that now for every 3 books sold in the market, 1 is sold through the short video e-commerce channel.

the "power" of short video e-commerce in book retail has exceeded many people's expectations. after the sales of "the right bank of the ergun river" exceeded 5 million copies, chi zijian said in an interview with the media this year that "it was indeed unexpected."

"short video e-commerce has become the only channel with positive growth, which shows that short video's customer coverage is better than traditional e-commerce and other channels such as physical stores. readers are more active on short video platforms, and they can receive more information about books from short video e-commerce." yu yu (pseudonym), a senior publishing industry practitioner, told reporters.

"compared with traditional channels, short video e-commerce will bring more opportunities to some highly adaptable businesses, especially some small start-ups, breaking the original relatively rigid pattern," said huang ping.

profit levels are squeezed again

under fierce market competition, the overall profit level of the book publishing industry has declined in recent years. according to the financial reports of a-share listed publishing companies, the gross profit margin of general book business of these companies in 2023 is mostly around 25%. this data seems acceptable, but after deducting the high proportion of returns, labor, taxes, logistics and other costs, the industry as a whole has already entered the era of small profits.

today, new changes in retail channels, especially the increase in the proportion of short video channels, which are extremely sensitive to traffic and price, may further squeeze profits in all links, bringing greater pressure to publishers and booksellers. many listed companies in the publishing industry mentioned the challenges brought about by this change in their announcements.

citic publishing publicly stated at the beginning of this year that the mass publishing market has faced some new challenges and opportunities in recent years. the company emphasized the transformation of channels, and short video e-commerce has become the only channel to achieve positive growth in the past two years. the publishing industry will face the challenge of low discounts squeezing profit margins for a certain period of time.

changjiang media also mentioned the "channel change risk" in its 2024 semi-annual report. the company said that with the rapid development of live streaming and short video e-commerce, the phenomenon of low-discount price wars has become more prominent. in 2023, short video e-commerce will become the second largest book sales channel after traditional e-commerce platforms, further squeezing the market share, bargaining power and profit margins of traditional distribution channels.

some listed companies also responded to investors' inquiries about book discount rates and pricing strategies by stating that with the rapid growth of short video e-commerce, the overall discount rate in the book market has declined to a certain extent. even so, facing the only growth channel in the market, both publishing companies and booksellers cannot easily ignore short video e-commerce.

"short video channels have incomparable advantages. for example, they convey more content, emotions, values, etc., and spread faster and wider; they explain the content of books in a multi-dimensional and three-dimensional manner, and achieve better results, etc. therefore, i am still optimistic about this channel." zhou yaoguang, deputy general manager of cicc yiyun, told reporters.

"in fact, consumers' choice is already very clear. short video e-commerce is a book retail channel that cannot be ignored or avoided. we should look at it rationally, understand it, and make good use of it based on our own actual situation." zhou yaoguang said.

yu yu believes that although short video e-commerce offers large discounts and may even cause publishers to lose money, it is a platform that can bring huge traffic and sales. under the current circumstances, the industry should actively embrace it and not ignore its value. "in the short term, short video e-commerce will have a certain depreciation in economic indicators, but the industry cannot do without it, just like embracing traditional e-commerce channels in the past, it is 'painful and happy'."

in fact, increasing investment in short video e-commerce has long become the industry's "only choice." for example, zhejiang edition media said that the company continues to promote the construction of an online and offline distribution chain system, accelerate the layout of the short video e-commerce track, and achieve improvements in business management, operating efficiency, and service quality in the distribution sector.

rongxin culture said that short video e-commerce channels are growing rapidly in the overall book retail market, and their market share continues to rise. in the face of the current market situation, the company fully utilizes the promotional role of short videos and live broadcasts on the douyin platform, and at the same time leverages the promotion effects of video accounts, kuaishou, and physical stores to maximize exposure and visibility.

in the past, zhongtu.com's sales mainly relied on traditional e-commerce, but now the company is also vigorously increasing its investment in short video e-commerce. "short video e-commerce is an emerging channel, and this market will grow in the future. we must devote more efforts, provide better policies, and strive to occupy a place in the emerging channels." huang ping frankly said that short video e-commerce has become the only growing channel, which is a reality that publishers and distributors have to face.

you can’t just “roll” the price

in the early years of the book retail channel switching from physical stores to e-commerce, the industry has experienced a round of "discount baptism". the consequence is that the discounts on book sales on e-commerce platforms continue to increase, and publishers can only stabilize their profit levels by raising book prices. the industry has thus fallen into a "vicious circle" of rising book prices and increasing discounts.

for example, in the market environment in the first half of this year, the average price of books has reached 45.55 yuan, an increase of 1.58% year-on-year. many practitioners told reporters that publishers are not only tired of the high-pricing, low-discount model, but consumers are also generally disgusted. in the first half of this year, many publishing houses in beijing and shanghai jointly announced that they would refuse to participate in the low-discount promotion on a certain e-commerce platform.

but the reality is that the overall retail sales of books are still declining, and short video e-commerce, which is more sensitive to prices, has become the only growth channel. in the aforementioned report, cicc yiyun mentioned the characteristics of the current book market and pointed out that "price power has become the biggest sales driving force."

"the value of knowledge is getting higher and higher, and the costs of personnel and materials are getting more and more expensive. objectively, the price of books must be able to cover the costs, so the pricing of books has shown an upward trend. but the current ecology of the entire industrial chain is not very good, and it has unilaterally embarked on a high-pricing, low-discount model. this is very bad and is not conducive to the healthy development of the industry." yu yu said.

yu yu believes that book pricing should be market-oriented, taking into account consumers' affordability and balancing the publisher's various costs, rather than simply inflating prices and then offering heavy discounts as is done now.

zhou yaoguang also said that a good price is not just about being low, but whether consumers think it is worth it. "readers don't consider the publisher's costs or profits. when they buy a book, they decide whether it is worth it. the publisher needs to convey the value of the product in various ways, and when producing it, they need to position the book well."

one issue that cannot be ignored is that even though the discounts on books are increasing and the industry's profits are being squeezed, it is an indisputable fact that the industry's overall retail sales are falling instead of rising. this means that the root cause of the current problems in the book market may not just be the price.

many industry insiders told reporters that the current book market is facing some problems on both the supply and demand sides. in zhou yaoguang's view, the decline in the book retail market is mainly due to changes in the demand side. the changes in the demand side have also affected the psychology of the supply side, leading to some problems in the publishing rhythm of some companies in the first half of this year.

"the market is changing, channels are changing, and readers' psychology and needs are also changing. this means that supply cannot be carried out according to the original model. our current supply cannot keep up with current demand. for example, from the perspective of general marketing 4ps (product, price, channel, promotion), it cannot fully match readers' needs. there is indeed a lot to be done on the supply side." zhou yaoguang said.