VietNamNet Bridge – Traditional book houses, which are now threatened by online book houses, have to find a new way for themselves to exist and develop.

Publication no more a profitable industry

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It’s not easy to make money

Fahasa and Phuong Nam are considered the two biggest book distribution chains in Vietnam, with the distribution networks reaching out to every corner in the country.

Since they are the two biggest distributors, they are the most powerful ones, to which every publishing house wants to sell their books to.

Fahasa now runs a network of 60 bookstores in 30 provinces and cities throughout the country. Its total turnover reached VND1.517 trillion in 2012, an increase of 7 percent over 2011. A part of the profit was brought by the discount rate of 55 percent offered by the publishing houses.

However, not all the book distribution chains can make profit. In February, the Phuong Nam distribution chain had to change its manager. Phan Thi Le, Chair of the Board of Directors has invited Stanley Gunn, Australian and South African nationalities, to manage Phuong Nam, which has been incurring loss.

In 2012, Phuong Nam’s net turnover was minus VND16.8 billion, while it still cannot pay the VND70 billion debt owed to the Kim Dong Publishing House.

A big sum of Phuong Nam capital has been “buried” in unsold publications. In general, it printed VND2,000-3,000 copies for every book, but the sale was very weak, which has led to the big inventories.

According to Quach Thu Nguyet, former Director of Tre Publishing House, the book buyers in Vietnam are mostly the ones with the monthly income of over VND10 million.  They would spend 10 percent of their income to buy books. However, the number of the high income earners in Vietnam remains modest.

In fact, book distribution chains in Vietnam are facing big challenges caused by the pirate books.

A book with the official selling price of VND150,000-300,000 could be found on the black market at the prices of VND70,000-100,000 only. It’s obvious that the pirate books can be sold better than the copyrighted books, because they are cheaper and affordable to Vietnamese.

And the biggest threat to publishing houses and book distribution chains is the rapid development of Internet.

Analysts have commented that the Vietnamese literature has been developing depending on the development of technology and Internet. Young writers have been developing their blogs as the PR and advertisement channels for their books.

Trang Ha, Tam Phan or Gap, the newly emerged authors, have become better-known thanks to Internet. Tam Phan, who writes books, introduces and advertises the books, has successfully sold the third book so far.

Looking for a new way to develop

In such circumstances, book houses have to look for a new way to follow. Phuong Nam, for example, now tries to look for drafts, then joins forces with publishing houses, chooses the book design so as to have the books with the best prices and quality. After that, it distributes books itself, and even holds press conference before carrying out distribution campaigns.

However, the biggest threat to the book distribution chains comes from online distributors.

Online distributors reportedly receive big investments from big investment funds. IDG fund, for example, has injected $500,000 on Vinabook, the online book sale website.

In 2012, Tiki received the investment from CyberAgent, belonging to CyberAgent Inc, one of the biggest online service firms from Japan.

NCDT