Acquisition is the way for Chinese publishing companies
Updated: 2012-05-29 10:23
By Mei Jia (China Daily)
Jiangsu-based Phoenix Publishing & Media (PPM) Group announced its foray into the United Kingdom during the 2012 London Book Fair, joining the increasing number of Chinese publishers who are taking their business overseas.
Group international business development director Liu Feng says PPM International (London) Ltd will start with print services before gradually extending into other cultural businesses.
"The UK is an important book market and naturally, it was our first choice when we were deciding which oversea destination to set up our business," Liu says.
Apart from printing, the company plans to hold exchange programs for Chinese and British writers, who will chronicle their experiences living in each other's countries. Their stories will be published, Liu explains.
PPM is also exploring the possibility of extending the company's business to other European countries.
Paul Richardson, publishing expert in the UK and an ex-counselor on China Book International project, says in an e-mail that his country is one of the best choices for Chinese publishers.
"The UK is an attractive base from which to launch international expansion," Richardson says.
"It is the biggest exporter of books and the second biggest exporter of copyrights in the world; over 40 percent of UK publishers' income comes from export sales, not including rights income, so it is an excellent jumping-off point for world markets."
But Richardson also points out the risks, which included establishing the company's brand in a highly competitive market in the UK and building a sales and marketing apparatus from scratch.
"Finding effective distribution is a long haul in a market as well-developed as the UK, dominated as it is by very well-established international publishing groups," he adds.
Richardson believes both licensed rights and joint ventures have limitations.
"Forming a joint venture does give the Chinese partner a stronger position in the market, but it leaves operational control mainly in the hands of the local partner and dilutes the profit," he says.
Richardson suggests acquisition, which will fast-forward Chinese publishers into global markets. And he notices that Chinese publishers are heading that way.
"I would be very surprised if there was not an announcement of a significant publishing acquisition of a UK-based publisher by a Chinese group within the next two years," he predicts.