Bertelsmann to target China's middle-class

Bertelsmann to target China's middle-class

Penguin Random House’s parent company Bertelsmann has said it is to target growth in media, services and education in China.

The company announced its plans, alongside the sale of two holdings from the Bertelsmann Asia Investments (BAI) fund, which generated proceeds of around $71m (£43.4m).

Penguin Random House distributes international bestsellers in physical and e-book formats in China. Meanwhile Bertelsmann’s Fremantle Media (RTL Group) has brought TV franchises including “The X-Factor” to China; while Gruner + Jahr publishes parenting, women's, men's and lifestyle magazines with its partner Boda; and Arvato, Bertelsmann’s biggest division in China, has a nationwide logistics network and is a partner to international and Chinese corporations.

Annabelle Yu Long, chief executive at Bertelsmann China Corporate Center and managing director of BAI, said: “We’re a big player with strong brands and a well-known name; Bertelsmann has enormous chances in the Chinese market with its first-class media content and services.

“In China, the largest middle class in the world is emerging – and this middle class wants to watch exactly the same TV shows, read the same books and listen to the same music as their counterparts in the rest of the world. Bertelsmann has these shows, these books and these songs.”

She continued: “The new government announced the further opening up and deregulation of the Chinese market, which we believe is very promising. China is well on its way to becoming a normal market and an integral component of the global economy.

“We will continue to bring passion and entrepreneurial thinking to opening up growth opportunities for Bertelsmann in the three strategic areas of media, services and education.”

BAI has sold its financial stake in Chinese online platform BitAuto, generating total proceeds of $65m (£39.7m). It has also disposed of its shares in the start-up Yoho, a youth lifestyle platform, for a further $6m (£3.7m).

The BAI investment fund, which has holdings in about 25 companies and other funds in China, was established in 2008 as a strategic fund. Over the past four years, the fund has repeatedly been listed as one of the country’s Top 50 investors.