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Bookstores reinvented for digital age
2016-09-23, WU YIYAO

Every Saturday, accountant Liu Xincheng, 28, makes a special effort to reach the SiSYPHE bookstore in central Shanghai’s Joy City shopping mall, before most other customers.

“You have to arrive there early in order to secure a place to read or a seat in the cafe within the bookstore. After 1 pm, the entire place is fully occupied, and you have to line up for a seat, to browse a shelf and to pay at the counter,” said Liu.

The bookstore is divided into three main sections: Books area, cultural area and creative products area. In addition, there is a coffee area and a “public study” area to cater to young readers such as Liu.

“I even bring my date here. We don’t talk much because everyone is reading, and each of us just reads the books we pick,” he said. 

“But we don’t have to buy. It feels good when you can relax, have some quality time, read something and learn something. It does not cost much.”

SiSYPHE is one of the scores of branded bookstore chains in China that has been trying to balance the need to be profitable with the urge to provide an environment that is friendly to book readers.

Rents in prime commercial properties have been soaring so much in key cities that many bookstores had to close down. The survivors are now offering a bigger range of products and services to supplement the high cost of — and low profits from — selling books.

According to a research note from China Galaxy Securities, gross profit of book distributors is about 10 percent, while that of creative products such as notebooks, stationery, T-shirts and canvas bags can reach 50 percent. Bookstore cafes, meanwhile, can see 75 percent margins.

Liu Gui, managing director of JIC Books Investment, a cultural investment arm of JIC Group, said bookstores have been undergoing an evolutionary transition.

The 1,500-square-meter flagship bookstore of JIC Books focuses on biographies of business figures, celebrities, statesmen and cultural icons. It also hosts a cafe, a function room, a library and a gallery.

“The bookstore is more like a space that attracts people with shared interests, and they can talk, appreciate art, listen to music and hold meetings. It can serve as a gallery that displays creative works, and it can offer space for forums,” Liu said.

“It is no longer just a pure-play bookstore. It is ‘bookstore plus’, offering a comprehensive space for guests.” 

In the east coast city of Hangzhou, JIC Books cooperates with a trust company to function as a “book plus financial” destination, or a community targeting guests who need wealth management services.

Meanwhile in Wuxi, a city near Shanghai, the bookstore is located in a hotel, thus becoming a meeting spot for the “book plus tourism” community, mainly comprising tourists.

In Beijing, the bookstore opened in a lifestyle complex targeting retirees, adopting a “book plus lifestyle” model, said Liu.

“I believe if such models work well, more capital will enter the market to help bookstores grow,” said Liu.

Bookstores worldwide have had a difficult time since the 2008 global financial crisis, and have only recovered in the past two years, with some outperforming others.

But all market players have been pondering how to deal with the popularity of e-books, online sales and e-book readers. All these factors mean that there are fewer readers and lower sales at brick-and-mortar bookstores.

Barnes & Noble, the largest book retailer in the United States, plans to open restaurants in bookstores.

In the United Kingdom, book chain Waterstones enables each of its stores to plan its lectures and events to suit the demand from readers in various regions.

In Japan, Daikanyama T-site hosts not only bookstores but a DVD library, a Starbucks coffee shop and even a pet care center.

Cheng Sanguo, CEO of Bookdao.com, an information platform for the publishing and books industry, said the future of bookstores is “X plus books”.

“Reading is a solid demand but you don’t have to read a book just in a bookstore. You can grab a book when waiting in a hospital, or choose a recipe when shopping for groceries.”

He added that he was impressed with the model that Japanese chain Muji has followed. “In Muji you have food, clothing, bedding, furniture, coffee and interior design,” Cheng said.

“Buyers of these can always extend their shopping to lifestyle books. This is what we call the 3.0 version of a bookstore. If investors are interested in entering the book distribution market, bookstore 3.0 is a good option,” said Cheng.


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