360Buy Heats Up E-Books, People’s Daily Goes to Market 京东商城高调进军电子书,人民网开启上市进程

By newsdoug on January 10, 2012

E-commerce leaders 360Buy and Dangdang (NYSE: DANG) seem to be locked together in a dangerous dance that has seen them launch one price war after another in their attempts to steal business from each other. Just weeks after Dangdang, which rose to prominence as an online book seller, finally discovered e-books (previous post), 360Buy, which also goes by the name of Jingdong Mall, has launched its own very high profile move into e-books as well, in what’s likely to turn into yet the latest bloody price war between these two companies. (English article; Chinese article) 360Buy has released lots of details about this latest high-profile initiative, saying its online bookstore will launch next month and will include more than 80,000 titles from 200 suppliers. Look for lots of bargains when this new online bookstore comes online, which no doubt will be met with equal bargains from Dangdang, pushing both companies deeper into the red. This latest looming price war, which looks to be quite big, is an appropriate start to 2012, when we can expect to see a major cleanup of China’s unruly e-commerce and group buying spaces where competition has become rampant and many companies are now losing big money. Many companies are likely to close in the cleanup, though I would expect both Dangdang and 360Buy to survive, as the latter chases an IPO to raise $1 billion or more in the US. Speaking of IPOs, domestic media are reporting that People’s Net, the online site of the People’s Daily, the official newspaper of the Communist Party, has started a process to raise around 527 million yuan, or $82 million, through a domestic IPO. (Chinese article) That news comes just 2 weeks after similar reports emerged that another major state-run media, Xinhua, was also planning a $150 million IPO for its website, Xinhuanet. (previous post) IPOs by these 2 big hallmarks of state-run media are a clear signal that China is finally loosening its grip on the sensitive media sector, and we should expect to see a steady stream of major media firms listing some of their assets in the year ahead, including some potentially interesting offerings from other major players like Shanghai Media Group and Southern Media Group.

Bottom line: 2012 is starting with a dramatic new price war between Dangdang and 360Buy in e-books, while an IPO by People’s Daily’s website augers a new wave of media listings.

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