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Kindle is Staying in China, But Will its Success Story Continue?

TMTPOST

TMTPOST

· 1月18日

E-reader devices like Kindle seem to be outdated as not many people actually use them. But surprisingly, many hardware makers and content providers in China are investing in this particular line of business.

Amazon’s e-reader Kindle is currently unavailable for purchase on major e-commerce platforms such as Taobao and JD.com in China. Though Amazon has clarified that some Kindle models are merely sold out, there are nonetheless speculations that Kindle will soon exit from the Chinese market.

If you search Kindle on China’s major e-commerce platforms, chances are you could only find stocks from third-party vendors. All Kindle models are not available on Amazon’s own site as well.

Amazon representative had responded to the situation with a statement, saying that Amazon is committed to serving Chinese consumers. “Consumers can purchase Kindle devices through third-party online and offline retailers,” the representative said. “Kindle is loved by our Chinese customers. Some of the models are currently out of stock in China.”

Kindle might boast a good sales performance in the Chinese market, but its utility has been questioned by consumers. Many Kindle owners would joke that their Kindle is only useful when they are making instant noodles since they can put Kindle on top of the cup noodle to prevent heat from escaping.

While Kindle devices fail to provide users with a smooth user experience like mobile apps on smartphones, the content on the Kindle store also disappoints users when compared with the amount of free content on the Internet.

E-reader devices like Kindle seem to be outdated as not many people actually use it. But surprisingly, many hardware makers and content providers in China are investing in this particular line of business.

Kindle used for covering cup noodles

“Best for covering cup noodles?”

Kindle has been a very successful e-reader product in the global market, including the Chinese market. In its home market, a Kindle model was once sold out in less than six hours, breaking records. Since its entry into the Chinese market in June 2013, Kindle has always been the top e-reader brand with an exceptional sales performance.

In 2018, China became Kindle’s biggest market globally. According to statistics from Amazon China, Kindle had sold millions of units in the Chinese market during its five years of operation in China. Kindle China had around 700,000 million books on its platform at that time, which was around ten times greater than the figure in 2013.

A number of Chinese companies saw the potential in e-readers and moved to invest in the field. The surging investment in the sector gave birth to e-readers from companies like iReader Technology, Xiaomi and BOOX, etc. The competition then got stronger in the e-reader market. However, Kindle’s dominance in the market remains intact, which is reflected by its sales records.

Kindle Paperwhite’s fourth-generation model has accumulated over 200,000 reviews on JD.com. In comparison, Xiaomi and IReader’s bestselling e-readers both have around 50,000 reviews. BOOX’s e-reader, on the other hand, only has about 10,000 reviews on the e-commerce platform.

It makes sense for Kindle devices to be sold out in China given the popularity it enjoys in the market.

In fact, some Kindle models are also sold out on Amazon and other e-commerce platforms in many countries. According to pundits, the situation in the Chinese market is not unique but quite common globally due to a chip shortage in the supply chain.

Origin of Kindle's linkage with instant noodles 

It is worth noting that even Amazon itself has recognized the phrase of “best item for covering your instant noodles”, which was coined by Chinese netizens, by including it in its commercial campaigns.  On March 22, 2019, Amazon uploaded a commercial poster of Kindle on its Tmall flagship store, which said “using Kindle makes your cup noodles more delicious.”

Amazon recognizing its instant noodle cap status with its commercial

The commercial line with a sarcastic tone might be written to make potential customers laugh and catch their attention but it did point out Kindle’s awkward status as well. Many users would not actually use Kindle that often after purchase. That is why some users would use their Kindle to cover their cup noodles and did not care about whether it damaged their device.

Not all users like the meme.

“Some people say Kindle is best used for covering cup noodles. This is interesting,” a netizen wrote on social media. “Everyone is talking about it like some kind of joke. But it is actually embarrassing. What is there to be proud of for buying Kindle and only using it to cover cup noodles?”

The problem with Amazon’s e-reader business in China is that people are investing less time in reading. “The problem here is the decline of books, including e-books. There have been drastic changes in how people consume information. Short videos and short-form content have changed how we receive information,” a netizen said on social media. “Only some professionals would actually read books now.”

No longer a niche product

Changes in consumer behavior led to the change of perceived utility of Kindle.

The e-reader device originally had three features that appealed to consumers. First, Kindle devices all use e-ink displays that provide a comfortable reading experience similar to that of reading an actual book. Second, Kindle has limited functions, which help users avoid distraction and fully immerse themselves in books. Lastly, Kindle has access to Amazon’s growing e-book library while being extremely light.

These advantages match Amazon’s founder Jeff Bezos’s opinion on Kindle as a product. Bezos believes that Kindle needs to be a serious cultural medium in order to be a successful product. However, Kindle’s situation in China shows that the product also needs to keep up with consumers’ changing habits so as to be successful.

Chinese Academy of Press and Publication‘s 18th national survey results show 43.4% of Chinese adults prefer reading an actual book, while 33.4% of adults prefer reading on their smartphone. Only 8.6% of respondents said they read books on an e-reader device. Survey respondents who preferred listening to audiobooks accounted for 6.7% of the surveyed.

Such statistics show that when it comes to reading on an electronic device, smartphone is the option for the majority of users. The popularity of listening to audiobooks is also catching up with reading on e-readers.  Although e-readers are still enjoying growth in the market, the growth has been slowing down when compared with smartphones and audio books.

Besides, e-readers have their own flaws as well. Let us look at Kindle for example. Users can only read e-books from Amazon on a Kindle device. In addition, e-ink displays have low refresh rates, which inevitably makes e-reader device appear to be laggy. Reading PDF files and picture books on a Kindle device is not enjoyable as well since it can only display two colors – black and white.

Kindle is appearing to be an outdated product like music players that were stifled by the rise of smartphones. Smartphones are getting bigger displays with a better viewing experience while encompassing an array of features. It is natural for e-readers like Kindle to be outcompeted in the market.

In 2020, Chinese adults spent 100.75 minutes on their smartphones on a daily basis, while the average use of e-readers was merely 11.44 minutes.  

Kindle’s biggest challenge lies in its core competitiveness as a product, according to pundits of the tech industry. It does not provide a smooth user experience that modern users have gotten accustomed to on smartphones while focusing on a very niche market. These are the reasons why it is expensive for Amazon to operate its Kindle business in China.

Challengers such as iReader, Xiaomi and BOOX might have taken some of the market shares from Kindle with products that better cater to local consumers, but they might not be able to outcompete smartphones in the digital reading sector.

iReader e-reader

Kindle’s hardware might not be able to offer a satisfying user experience to consumers, it does have abundant e-book resources. According to Kindle, there are over 700,000 books on its platform. In most cases, users should be able to find the books they want to read on the Kindle Store. iReader is the only Chinese company that provides both e-reader devices and its own e-book library. It has more than 600,000 books on its platform, still a little behind Kindle.

Meanwhile, Kindle also differs from other e-reader devices because it is a supplementary device to an e-commerce platform – Amazon. This makes Kindle similar to JD.com’s JDread. In comparison, e-readers from iReader are supplementary products to mobile applications that specialize in e-books.

Both types of e-readers face a common issue – piracy. It is not yet a norm in China to pay for reading e-books on the Internet, which makes it harder for Kindle to tap into the Chinese market since it adopts a premium model. Some Kindle users would download pirated e-books and send them to their Kindle devices through Kindle’s push service.

There are plenty of free e-book resources for users to download on the Internet. To make matters worse, there are also businesses that specialize in pirating e-books. They would sell e-books that are priced at around 10~20 yuan on websites or social media platforms for only a couple of yuan.

Chinese e-readers have rolled out subscription modes such as monthly subscriptions to solve the pain point for users. E-readers that do not have their own content platform can be directly used for reading pirated e-books downloaded from the Internet.

Kindle has maintained its dominance in the e-reader market but it is no longer the must-have e-reader.

Why still investing in e-readers that appear unnecessary?

Besides the e-ink display, e-readers do not seem to have anything special to offer to consumers. But why companies continue to invest in a product that has low market demand?

“These companies are making hardware for the entire online literature market,” Zhang Yi, board chair of market research firm iiMedia said. iReader and China Literature launched their e-readers not only for the hardware market but also the entire e-book ecosystem.

Kindle is the inspiration for Chinese e-reader makers. When Kindle was first launched in the market, with each Kindle device sold, Amazon lost US$2~3. But the loss from selling Kindle did not bother Amazon because the company was looking to profit from selling digital content to users. Kindle enabled Amazon to build up a user base for its content ecosystem.

In other words, e-readers are portals to content platforms. With e-reader hardware, platforms can better promote their content or subscription to users.

Mobile reading apps are becoming very popular in China, which also helps to convert users into consumers of online literature content.

The demand and supply of digital books are growing fast in the Chinese market. It is estimated that the digital book market had reached a scale of 34.59 billion yuan in 2021. Even though the majority of users consume digital books on their smartphone, they are nonetheless potential users of e-readers.

Kindle might be used by some users for covering their cup noodles, but the market it operates in is still worth investing for hardware and content providers.

E-reader makers are designing new types of hardware to make e-readers more useful. There are already Chinese hardware makers that are making e-readers with diverse functions like a smartphone, such as note-taking, transcribing and sending emails.

Hanvon’s e-reader with business features

Hanvon recently launched its Hanvon 1001 e-reader that runs on Android OS. Users can use different apps on the e-reader, including listening to music, audio books and writing notes.

It remains unknown whether consumers would like the idea of smartphone-like e-readers. Future developments in the market will reveal the answer.

(The article is translated and edited with authorization from the author @锌刻度, please note source and hyperlink when reproduce. The original article can be found here.)

Translator: Garrett Li

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