Page 65 - How China Is Winning the Tech Race

Back in 1999 when Dangdang was beginning, China’s long-slumbering
book trade was awakening in the aftermath of the Cultural Revolution,
during which books were burned and intellectuals were jailed. Meanwhile, in
the United States, Amazon, with its new Internet distribution system for
books, was on fire.
It was easy for YuYu, whose parents were sent to re-education camps
during the Cultural Revolution and who was raised by her grandparents in
Sichuan province, to envision a better lifestyle for China. What better road to
improvements was there than literature? Her husband, a book publisher in
China, was equally frustrated by the stark contrast he saw between the
consumer-driven West and the more limited selections in his communist-con-
trolled homeland. He found the state-owned bookstores abysmal and the
shelf life of even best sellers very short. “My husband hated the way distri-
bution was handled in stores. Both consumers and publishers were poorly
served,” she says, pointing to the Internet as the means to modernize China’s
antiquated bookselling business.
From the start, it was clear that they were dreaming big. The repeated
syllable in the company’s name means “worthy” in Mandarin. It also vaguely
sounds like the sound of a cash register opening and closing.
Laying the cornerstone for Dangdang, YuYu and her husband spent two
years developing the first comprehensive nationwide database of 200,000
books in China. It categorized books by specific subject matter instead of
using broad headings such as history and geography. For example, YuYu
points to the traditional way Chinese retailers put a book on how to find a
boyfriend in the same place as a sociology textbook. “They use the library
science classification system, so it didn’t really cater to consumers,” YuYu
relates, sipping tea while we meet at her Beijing office. Her system has been
“copied by everyone now and is almost like the industry standard,” she adds. 6
In November 1999, the Web site was launched thanks to Dangdang’s
database, which made it possible to search for specific books online, just in
time for the Internet boom. By then, Amazon had been in business for four
years and had been listed on Nasdaq since 1997; its founder, Bezos, had
become a dot-com celebrity. Seemingly every Chinese entrepreneur was a
Bezos wannabe. Within months, Dangdang had some 300 competitors.
Dangdang faced China-specific growing pains. One problem was that
Chinese consumers weren’t used to using credit cards to pay for goods online.

Dangdang.com—The Amazon-Plus of China 39