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eBOOK DYNASTY: TOPICS: How much should ebooks cost in China?
How much should ebooks cost in China?

Results of a recent survey conducted by the Chinese Academy of Press and Publication (CAPP) were released on April 19. According to China's Xinhua News Agency, the survey shows that in 2011, Chinese people between the ages of 18 and 70 read 613 million electronic books.

According to Xinhua, the survey covered more than 19,000 people from 51 cities in 29 (out of 31) of China's provincial regions. It indicates that among those Chinese surveyed, 23 percent read ebooks via their mobile phones. Another 3.9 percent read on their e-readers, and about 18 percent read on the Internet.

The same news item was also picked up by Tech in Asia, which published an article titled "Chinese Readers Expect E-Books to Cost Just 50 Cents" on May 10. Interestingly, quoting from a different source, the article by Tech in Asia provides a considerably different set of results of the aforementioned CAPP survey. According to this article, 9.4 percent of those interviewed like to read on their mobile phone. While only 2.5 percent like to read on their e-readers, 11.8 percent read on the Internet.

Here is a typical example of how the same news item can be analyzed from completely different perspectives to generate dramatically varied impacts on readers. There is no doubt that Xinhua's focus is on the so-called ebook boom in China. "The survey indicates a marked increase in the popularity of ebooks. It shows only 16.4 percent of Chinese ebook readers buy paper books after reading the electronic versions," Xinhua says.

In sharp contrast, the article by Tech in Asia reveals "the [CAPP] discovered which reading medium is preferred: 75.3 percent said they like to hold and read paper books". To further turn away anyone who is interested in publishing ebooks in China, the article announces that "in news that bodes ill for book publishers, a survey of Chinese folks has revealed that 'most readers will tolerate an average ebook price of 3.5 RMB'. That's just a little over 50 cents [in U.S. dollars]".

The article by Tech in Asia goes on to explain that paper books are "generally cheap in China -- rarely more than 15 RMB (US$2.38) for a popular title -- so the lack of a physical product seems to make local consumers demand an even lower price point". It further explains the average prices of the top 10 titles on two popular Chinese ebook stores are 5.36 and 4.70 RMB. "So actual prices are only a few [U.S.] cents above what consumers expect," the article concludes.

While this notion of "ebook for only 50 cents" appears to have upset some writers in the West, it should be noted here that the article by Tech in Asia has failed to clarify an important factor -- the living standard in China. Consider the comparison that China's gross domestic product (GDP) per capita in 2011 was approximately US$5,414, when that in the United States in the same year was US$48,387. That is to say, in 2011, the average person in the United States earned nearly nine times more than his Chinese counterpart did.

Take the renowned Big Mac Index as another example. In July 2011, the price of a Big Mac was US$4.07 in the United States, but only US$2.27 in China. The use of the Big Mac Index here is significant because it has more to do with disposable income than with people's daily living expenses.

Indeed, in China's top three municipalities -- Tianjin, Shanghai and Beijing -- the GDP per capita in 2011 was about US$12,386. People in these urban areas can certainly afford a fair amount of Big Mac burgers.

In sharp contrast, seven out of China's 31 provincial regions registered a GDP per capita of less than US$4,000 in 2011, with Guizhou Province in the country's southwest recording only US$2,545 in that year. One can safely assume that people there seldom think about Western-style food items in their daily struggles to earn a living.

Perhaps the most meaningful index to use is the GNI (PPP) per capita, which calculates in international dollar, a "hypothetical unit of currency that has the same purchasing power that the U.S. dollar had in the United States at a given point in time". In 2010, the GNI (PPP) per capita in the United States was 47,310 international dollars, while that in the China was only 7,640.

These figures suggest that in 2010, the purchasing power of Chinese people was approximately 16 percent of that of their American counterparts. Therefore, if the average ebook price in the United States was US$2.99 in 2010, then it would have appeared reasonable for Chinese readers to expect an average ebook price of US$0.48.

Hopefully, the analysis above will help all authors in the West avoid being misled by the article by Tech in Asia. 50 cents may mean very little in the United States, but it can purchase a whole meal in some parts of China.


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