Online bookshop switches from B2C to B2B

CHINA (SCMP.com) - SAR-listed Ocean-Land Group will switch the focus of its online bookshop from business-to-customer (B2C) to business-to-business (B2B) in a bid to cut losses.

"The bookshop has been running for a few months but the B2C business has proven to be unsatisfactory," said Ocean-Land chairman Yuen Wai.

Called ebookschina.com, the site is 70 percent-owned by Ocean-Land and 30 percent-owned by the mainland's largest book seller and distributor Xinhua Bookstore.

But the site, which sells books to retail customers in both Hong Kong and the mainland, has been incurring costs of almost 300,000 yuan (about HK$281,000, US$36,000) a month since its launch in April.

Yuen said the company would shift the Web site's emphasis to online distribution, reducing its focus on online retailing.

"We have built a B2B platform for Xinhua Bookstore, which it can use to distribute books online," Yuen said.

Xinhua distributes about 50 billion yuan (US$6 billion) worth of books every year.

Ocean-Land will charge Xinhua commission of about 0.3 percent on the turnover it makes by using Ocean-Land's business-to-business platform which will be launched in the first quarter next year as part of ebookschina.com.

Yuen expected the business-to-consumer platform would represent less than 1 percent of turnover. He said business had been affected by the bankruptcy of Hong Kong's biggest Internet bookseller, Chinese Books Cyberstore earlier this month.

The bankruptcy had dampened the market's enthusiasm for online retailing, making it more difficult for smaller online bookstores to raise capital, Yuen said.

He said dozens of business-to-consumer Internet bookstores were already operating in the mainland.

Yesterday, Ocean-Land also confirmed it had reached an intention of co-operation agreement with China National Container Corp (CNCC).

Under the agreement, the companies would form a joint venture to develop a logistics services chain in the mainland.

CNCC general manager Liang Weihua said the company would inject logistics service-related assets into the venture.

CNCC has 37 logistics centers and warehouse space of 156,500 square meters in the mainland, which had throughput of 4.56 million tonnes last year.

Ocean-Land would bring its electronic supply-chain management system, e-Distribution Network, to the joint venture.

"We believe that modern e-commerce must combine with conventional logistics organically to develop its full potential," Ocean-Land's Yuen said.

The two firms were ironing out details of the agreement which they expect to be finalised by the end of the year, he said.