A medium-sized bookstore in downtown Beijing is going out of business. All of their books are on sale. Bookstore owner Wang Jian says hot sales of books on internet and e-books online pushed him to change the way he does business.

"Now e-books are overtaking traditional books, and internet books stores are becoming more popular. This is one of the reasons why our in-store bookselling is harder than before. We are preparing to withdraw from this part of the business."

A report issued by leading world marketing information company AC Nielsen revealed that China has the highest online book purchasing rate in the world. About 63 percent of Chinese Internet users have made online purchases and 56 percent of the purchasers had bought reading materials, the highest ratio in the world. More than ten years ago, became the first online book retailer, and is now one of the main forces in the Chinese online book market.

Facing this challenge, the Xinhua Bookstore, the leading decades-old Chinese chain bookstore, also established its online store several years ago, but with a much smaller business scale. Zhang Jian, CEO of the , says now they are enlarging their online services.

"The Internet as a whole is making a huge impact on every aspect of the economy. The population using the Internet and changing their reading habits are independent of our will. As part of the traditional book industry, we have to notch up this part of the growing business."

A fierce "price war" is taking shape between traditional bookstores and their online counterparts. Faced with the low-cost advantage of online bookstores, traditional ones can do nothing but lower their prices. At the same time, online booksellers are also engaged in price wars between each other. For example, m and are two main forces in the online book selling market. Customers can frequently find certain books have a 50 percent discount on one Web site and 51 percent off on another. President and CEO of Yuyu explains their sales principle.

"Our core competitiveness is lower prices, more choices and more convenience. We detect the changing prices of books in the market, and always can provide the best deal for our customers."

With online booksellers matching each other's discounts and convenient shipping services, some traditional bookstores are trying their best to keep customers in their own way. Meng Fanjun is a bookstore manager.

"First we can better demonstrate our books to our customers. We can also create a very relaxed reading environment in our bookstore. For example, they can sit and read with the books in their hands. These are all the things that an online book store can't provide."

Traditional bookstores can hardly compete with some of the advantages of online bookstores, for example 24-hour service. Traditional bookstores, especially medium- and small-sized ones, are facing more challenges than ever in the era of the Internet.

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