A consortium of 24 children's literature publishers, including China Youth and Children's Publishing House and Jieli Publishing House, have issued a joint statement criticizing Beijing-based B2C e-commerce platform 360Buy for selling their works below production costs.
According to the statement, the 24 publishing houses never authorized the sale of their works by any merchant below the cost of production, and accused 360Buy of engaging in unfair competition and infringing upon their intellectual property rights, demanding the e-commerce site cease promoting and offering their publications at illegally low prices.
360Buy's book channel currently advertises more than 50,000 children's books available at a 60% discount.
Li Xueqian, director of China Youth and Children's Publishing House, said his firm never supplied books to 360Buy, nor did 360Buy inform the publisher it was selling its books, but a search on the website revealed more than 300 titles were for sale.
Bai Bing, editor-in-chief of Jieli Publishing House, said that direct costs, such as printing and copyrights, accounted for 30% of a book's price, while indirect management costs were approximately 15%, meaning the lowest possible cost of a book is 45% of its retail list price. Bookstores and resellers often receive a 40% discount, meaning that Jieli's profit margin is approximately 15%. Jieli also must assume responsibility for returned and defective books, making publishing a low-profit industry. Bai said that by offering a 60% discount and selling books below production costs, 360Buy is disturbing fair competition in the marketplace.
Bai added that if 360Buy's rival Dangdang (NYSE: DANG) lowers prices as well, it could trigger other online retailers and even offline booksellers to join in a price war that would force publishers to raise prices and reduce discounts to retailers, which would ultimately harm the consumer and the publishing industry as a whole.
Li and Bai expressed hopes that China's General Administration of Press and Publication (GAPP), National Development and Reform Commission (NDRC), State Administration for Industry and Commerce (SAIC), and other government agencies would intervene to curtail unfair competitive practices.