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AEP Online |
Unlocking the Mysteries of the Chinese Market, Part IIBy Charlene Gaynor, AEP Executive Director AEP Executive Director Charlene Gaynor recently embarked on a business development mission to China in search of opportunities for American educational publishers. In this, the second installment in a three-part series, she examines the channels publishers might use to gain access to this ripe market. During my stay in China, I met with several prominent Chinese publishers and found them all very receptive to the prospect of licensing rights from American companies. The huge growth of the market over such a short period of time has amplified the need for content, and native publishers are hungry for ideas from their foreign counterparts. In fact, Lijin Jai, the head of the Shanghai Administration for Press and Publications, expressed a particular interest in Western concepts and described the future of supplementals as "very promising." However, I also found that Chinese publishers have very specific interests, not only when it comes to content, but also teaching methodology. For instance, we learned through our meetings with leaders at East China Normal University Press in Shanghai that the Chinese Education Ministry is in the midst of shifting curriculum away from rote learning and memorization. The result is a high interest in cooperative learning materials and integrated curricula. But since there is no single platform or clearinghouse where publishers can go to place or fill requests for products, information like this is sparse; in other words, matching Chinese interests to American publishers may prove to be a daunting task. Another inroad for American publishers is export. Herein lies another challenge - understanding distribution in the Chinese education market. In China, products are rarely sold directly to schools. In most cases, the primary purchaser is the parent, who buys products from provincial or national chain bookstores based on recommendations from the Chinese Ministry of Education. The bookstores get their products through distributors, who act more or less as the gatekeepers between publishers and retailers. Only a handful of these distributors are national, which poses a classic yin and yang dilemma. Getting the attention of a major distributor can be difficult, especially for a small publisher. But being carried by such a distributor can afford access to an enormous market. One way to solve this dilemma could be to develop a relationship with the China Educational Publications Import & Export Corporation (CEPIEC), the government agency that imports educational books and materials from all over the world. According to Goa Yaling, the CEPIEC's deputy manager of educational materials import, the types of materials imported are often dictated by specific requests from schools. But because its scope is so far reaching - among its divisions are textbooks, catalog information services, bookstores, and distribution - it is nearly impossible for the CEPIEC to work with smaller, individual publishers. The British Embassy and Publishers Association combine to play a role in supporting imports from UK-based companies by preparing special catalogs and exhibits of products, and it was suggested on several occasions that AEP take on a similar role on behalf of American publishers. Finally, there is an emerging channel in private enterprises, the Chinese equivalent of educational consultants, who work directly with schools to evaluate and develop their curricula. A fairly new development in Chinese education resulting from the birth of free enterprise, these companies actually have showrooms in which they display an array of products from full curriculum packages to professional development materials. Becoming part of a private consulting firm's offerings is another, albeit limited, way to gain visibility and access. To recap, there are three ways American publishers can gain entry into the evolving Chinese education marketplace: 1) selling content, 2) exporting products, and 3) private enterprises. A number of companies such as Pearson and McGraw-Hill have made headway in licensing content, and a handful of companies such as Scholastic and Dorling Kindersley are selling into Chinese bookstores. But the fact that there are so few is evidence of the challenges publishers must overcome before the full potential of the market can be realized. The following is a list of roadblocks for American companies to keep in mind. 1. Matching up Chinese publishers' needs with American companies' products is reminiscent of finding a needle in a haystack, a huge hurdle to overcome. While AEP has entertained the possibility of setting up a clearinghouse for such purposes, we are still in the information-gathering stages at this point in time. 2. Understanding the flow of products in the Chinese market is key. Pursuing business with China's major distributors is more or less comparable to selling a product to an entire district as opposed to selling to individual schools in the U.S., except on a much larger scale. In other words, one would save a great deal of time and trouble by establishing a relationship with one of these companies. While we do not have complete information on every major distributor, the background we do have can be found at http://www.aepweb.org/international/chinadistributors. We will continue to update this page as more information becomes available. 3. Private enterprises may represent an inside track, providing a direct line to purchasers, but this new and fairly unexplored channel is still under development. 4. Since the market has not historically been open to international trade, there are very few examples available upon which to base a business model. Simply put, we're going where few U.S. publishers have gone before, and there are no roadmaps. With this series and the International section of our website, AEP will be keeping our members abreast of new information as we delve further into this unknown market. The third and final installation in this series will focus on the future role of AEP in facilitating business-to-business relations between U.S. and Chinese publishers. Questions, ideas, or in need of more information? Please contact Stacey Pusey at 856-241-7772. |
Click here for more on AEP's business development mission. |
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