RPT-INTERVIEW-Dangdang to roll out e-books by early 2012

Fri Dec 9, 2011 3:58am GMT

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By Huang Yuntao and Don Durfee

BEIJING, Dec 9 (Reuters) - China's biggest online book retailer E-Commerce China Dangdang Inc (DANG.N) plans to introduce e-books late this year or early next year, although it will be some time before the business becomes a key revenue contributor.

Dangdang would start with about 50,000 e-book titles that consumers would be able to download to their smartphones and tablet PCs, Chief Financial Officer Conor Yang told Reuters in an interview.

"Dangdang's focus is to be a content provider and a retailer of e-books. We already have an edge selling books online, so I think we'll become a leading player for e-books in China," Yang said from the company's headquarters in Beijing.

Dangdang is sometimes referred to as China's Amazon.com Inc (AMZN.O) as both are best known for selling books online, although Amazon also sells a wide range of other consumer products as well as its own Kindle series of e-book readers.

Dangdang, which used to get almost all of its revenue from selling books and other media products online, has also been trying to diversify into consumer products, such as cosmetics, shoes and furniture.

The online retailer will spend about $30 million in coming years to improve its logistics network and warehousing, including constructing its biggest warehouse in Tianjin.

As of the third quarter, the contribution from books and other media products to total revenue had fallen to about 70 percent.

China's online retail sector is highly competitive, with numerous players trying to undercut rivals in price.

Narrowing margins could ultimately see some players go out of business in the coming year or so, which would alleviate some price pressures.

"Our competitors will be using their cash quite carefully and price pressures will persist, but I expect competition among online companies to ease next year," Yang said.

Dangdang was founded by Peggy Yu, one of China's best known businesswoman, and her husband Li Guoqing about a decade ago, drawing inspiration from the business models of Amazon.com and Japan's Rakuten Inc 4755.OS.

Its shares, which started trading in New York in December last year with a stellar rise, have since fallen about 80 percent on concern over accounting scandals among foreign listed Chinese companies and stiff competition in the Chinese online market. On Thursday, Dangdang's shares were up 20 percent.

(Writing by Lee Chyen Yee; Editing by Chris Lewis)

((chyenyee.lee@thomsonreuters.com)(852 2843-6901)(Reuters Messaging: chyenyee.lee.reuters.com@reuters.net)) Keywords: DANGDANG/

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