Bertelsmann AG, the German media group, announced that it will close its 36 chain bookstores in 18 cities of China by the end of this month. As one of most successful bookseller in the world, Bertelsmann shares an excellent fame. With the help of the fast postal delivery and convenient online-paid system, initially, the status of Bertelsmann could not be replaced by other competitors. However, 13 years after Bertelsmann starting its business in China, it has to adjust its sale strategy, because of the pressure from the local competitors and the rising of the cost of the bookstore rental. Though Bertelsmann runs successfully in Europe and other places of the world, however, we should not suppose that it would win in Chinese market. For example, the reading habits of Europeans may be better than that in China, they always buy books through the Bertelsmann system. Moreover, according to the report from agencies that the price of book in China is 1/4 as high as that in Europe, ironically, the rental of the bookstore is nearly the same as that in developed countries. Thus, attributed to the high cost and low consumer records, Bertelsmann may be difficult to perform well as it is in other regions.

Furthermore, by imitating the postal delivery network and online purchase system, dozens of local booksellers receive the fairly high reward, comparing with Bertelsmann. Www.dangdang.com, www.amazon.cn and www.99read.com are main local competitors for Bertelsmann. The similarities of the competitors above are they don’t have entity bookstores, which will largely reduce their cost. In addition, their online service and delivery service are more available and friendly than what Bertelsmann supply. Last but not least, they adapt to the habits of Chinese readers. Selling the books in more various fields and themes, the local online booksellers are chosen by most of Chinese readers. What they need is not the most famous booksellers, but the most cheap and suitable books. In order to meet the demand of the mass, the local online booksellers give more discounts.

In my opinion, the failure of Bertelsmann warns the enterprises which plan to invest in China. Firstly, they should adapt to the characteristics of the social status qua, political environment and consuming habits of people. While purchasing the high profits, they should find suitable partners to conquer the barriers. Outsourcing industry really helps to handle the dilemmas. Without the rental of the offices and factories, the foreign investors will save a plenty of cost. Moreover, the companies which are engaged in ITO and BPO may play a significant role in the near future in the region of foreign trade. BPOVIA is a typical outsourcing enterprise, which provides universal service. The service will assist the foreign capitals to avoid the unaccommodated of Chinese market and society, which would eventually promote your business in China.

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foreign capitals, retreat of Bertelsmann