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“As online bookstores become more and more popular, traditional bookstores are disappearing, and a whole attitude and lifestyle is in danger of disappearing with them,” said Xue Yuan, author of the book Hello! The Independent Bookstores.
Every city is home to a certain number of bookstores. And a good bookstore is usually seen as a cultural landmark within a city. In Beijing, there is All Sages Books; in Nanjing, Librairie Bookstore; in Hangzhou, Fenglinwan Bookstore; in Guangzhou, Xooyo Book; and Eslite Bookstore in Taipei. While these landmark bookstores are not in immediate danger of disappearing, many smaller bookstores are vanishing from the maps of major cities. Recently, the temporary suspension of business at the large private O2 Sun chain of bookstores, which once operated over 30 outlets, aroused great concern from Beijing’s book lovers.
The Beijing News newspaper reported that O2 Sun Bookstore closed its Wudaokou branch in Haidian District, Beijing, and its Soho branch in Chaoyang District in Beijing, on October 29 when the company was unable to make payments to suppliers.
Sun Chi, founder of O2 Sun Bookstore, admitted that the bookstore had encountered some financial difficulties.
“However, we will try our best to maintain the management. Only if we can no longer pay our staff, will we consider closing some stores,” Sun said.
The O2 Sun Bookstore is just one of dozens of brick and mortar bookstores across the country that have encountered serious difficulties.
In recent years, many bookstores have gone out of business. Disanji Bookstore closed its doors in January 2010; Forest Song Bookstore stopped doing business in July 2010; SDX Joint Publishing Co. withdrew from Guangzhou this September.
Ailing operation
“Many readers only browse books in our bookstore, they go home and actually purchase their books online at a lower price. How can we survive?” said Chen Dingfang, founder of Guangzhou Xooyo Book, on his microblog.
With enormous choices and no pressure to pay rent, online bookstores offer customers lower prices. Dangdang, the biggest online bookstore in China, slashed its prices by 35 percent in April and by 50 percent in May as a way to attract customers. Online booksellers now control so much of the market share that traditional bookstores are now competing for an ever-shrinking share of the market.
The demand for books remains strong. However, purchases are simply being made online and traditional bookstores have effectively become free exhibition platforms for online bookstores.
“I used to buy books in traditional bookstores. I often went to the Soho branch of O2 Sun Bookstore with my friends and spent half a day there. But now, I choose to buy books online as it’s more convenient and cheaper,” said Yang Jing, a Beijing office worker.
“Rent and employees’ salaries now account for half of the total cost of a traditional bookstore. Online stores don’t have these burdens,” said Lu Jinbo, a renowned domestic publisher and General Manager of Wan Rong Book Co. Ltd.
The 17-year old Forest Song Bookstore, which was one of the three largest private bookstores in Beijing, has not reopened after it announced a temporary suspension of business in July. President of the bookstore Wang Hongbin said that the store rent had surpassed 50,000 yuan ($7874) monthly, which was more than the business could sustain. He added that a combination of rising rents and fierce competition from online retailers had rendered his bookstore unviable.
Sun Chi of the O2 Sun Bookstore is also not optimistic. “Sales revenue has gone from bad to worse in the last four years. This year revenues have dropped 40 percent! It is now in a struggle to pay our managers,” he said.
In the meantime, the market share of online booksellers has continued to expand. In addition to Dangdang and Joyo Amazon, many new online vendors have entered the market. 360buy began selling books at the end of 2010. Liu Qiangdong, CEO of 360buy, said that sales of the online store’s books and audio and video products would be worth more than 500 million yuan ($78.75 million) in 2011.
Transformation
Facing increasing competition from online booksellers, traditional bookstores are trying to revive their businesses. Some bookstores have begun to provide diversified services and offer space for seminars, coffee and socializing in order to win over customers.
Many people who traveled Taiwan would visit Eslite Bookstore and buy some books. However, renowned Hong Kong scholar Ma Chia-hui said book sale could not make profits for Eslite Bookstore at all. It is mainly relying on selling other goods to survive. Ma himself is a book lover and frequent caller of the Eslite Bookstore.
Yu Zhenghui, public relations manager at the Xiamen-based bookstore chain Apodon, believes that if traditional bookstores want to be more successful, their businesses have to provide readers with something online retailers cannot furnish.
Apodon Bookstore, instead of just selling books, provides an area in which customers can relax with comfortable sofas, coffee and free Wi-Fi.
“Apodon wants to give people the sense of belonging to a community,” said Yu.“Online bookstores and Apodon are not in competition because our services are different, though our target customers are the same group.”
O2 Sun Bookstore also tried to establish itself as a social space but its efforts didn’t yield satisfactory results. The management found that customers began coming to the bookstore only to enjoy the pleasant atmo- sphere and did not purchase any books.
One Way Street Library in Beijing has adopted another means of survival. Every week, it holds two salons, inviting writers, singers, artists and directors to introduce their works. The salons attract more potential customers to the store but at the moment the bookstore’s sales revenues are barely sufficient to meet its costs.
Some bookstores have also resorted to setting up their own online bookstores. For example, Xooyo Book, the Guangzhou-based bookstore, provides their customers with a 30-percent discount if they purchase books online. However compared to the prices offered by major online retailers such as Dangdang and 360buy, the prices offered by Xooyo Book are not competitive. For instance, the original price of a set of Zhu Rongji Speech Record is 196 yuan ($31), while Xooyo Book sells it at 156.8 yuan ($24.7) online and Dangdang 147 yuan ($ 23.1).
Backed by abundant capital, big online booksellers can negotiate with publishers and secure an assailable advantage in the retail price war.
“Traditional bookstores such as O2 Sun Bookstore have to expand their businesses to survive, but they don’t have access to bank loans or other financing channels, and they don’t generate enough revenue internally to expand their business. That’s the reason behind the current troubles,” said Lu, the publisher.
Appealing for favorable policy
Currently, with more and more traditional bookstores facing closure, many booklovers and bookstore owners are calling on the government to adopt measures to save traditional bookstores.
In many foreign countries, the government provides favorable policies for traditional bookstores. For example, traditional bookstores are exempt from income tax in France; the Canadian Government provides half the expenses for the computer facilities of independent bookstores; the Japanese and South Korean governments have adopted policies which seek to establish fair competition between traditional bookstores and online retailers, wrote the eminent Chinese scholar Wu Zuolai in an article in The Beijing News.
Recently, Vice Minister of General Administration of Press and Publication Yan Xiaohong said in an interview that the government is planning to exempt some Xinhua bookstores operating at the county level and below from paying value added tax (VAT).
According to a report by China Daily, there are about 140,000 to 150,000 bookstores in China at present, among which 14,000 are state-owned Xinhua bookstores while most of the rest are privately owned independent bookstores.
The VAT exemption is good news for state-owned Xinhua bookstores. However the owners of private bookstores are keen to receive the same tax privileges.
“Our government invests a lot of money in building libraries every year. Actually, our bookstores are also a kind of library in some sense. In addition, bookstores can also help resolve employment pressures and contribute taxes. The government should help us reduce our current burdens,” said Chen, founder of Xooyo Book, on his microblog.
Every city is home to a certain number of bookstores. And a good bookstore is usually seen as a cultural landmark within a city. In Beijing, there is All Sages Books; in Nanjing, Librairie Bookstore; in Hangzhou, Fenglinwan Bookstore; in Guangzhou, Xooyo Book; and Eslite Bookstore in Taipei. While these landmark bookstores are not in immediate danger of disappearing, many smaller bookstores are vanishing from the maps of major cities. Recently, the temporary suspension of business at the large private O2 Sun chain of bookstores, which once operated over 30 outlets, aroused great concern from Beijing’s book lovers.
The Beijing News newspaper reported that O2 Sun Bookstore closed its Wudaokou branch in Haidian District, Beijing, and its Soho branch in Chaoyang District in Beijing, on October 29 when the company was unable to make payments to suppliers.
Sun Chi, founder of O2 Sun Bookstore, admitted that the bookstore had encountered some financial difficulties.
“However, we will try our best to maintain the management. Only if we can no longer pay our staff, will we consider closing some stores,” Sun said.
The O2 Sun Bookstore is just one of dozens of brick and mortar bookstores across the country that have encountered serious difficulties.
In recent years, many bookstores have gone out of business. Disanji Bookstore closed its doors in January 2010; Forest Song Bookstore stopped doing business in July 2010; SDX Joint Publishing Co. withdrew from Guangzhou this September.
Ailing operation
“Many readers only browse books in our bookstore, they go home and actually purchase their books online at a lower price. How can we survive?” said Chen Dingfang, founder of Guangzhou Xooyo Book, on his microblog.
With enormous choices and no pressure to pay rent, online bookstores offer customers lower prices. Dangdang, the biggest online bookstore in China, slashed its prices by 35 percent in April and by 50 percent in May as a way to attract customers. Online booksellers now control so much of the market share that traditional bookstores are now competing for an ever-shrinking share of the market.
The demand for books remains strong. However, purchases are simply being made online and traditional bookstores have effectively become free exhibition platforms for online bookstores.
“I used to buy books in traditional bookstores. I often went to the Soho branch of O2 Sun Bookstore with my friends and spent half a day there. But now, I choose to buy books online as it’s more convenient and cheaper,” said Yang Jing, a Beijing office worker.
“Rent and employees’ salaries now account for half of the total cost of a traditional bookstore. Online stores don’t have these burdens,” said Lu Jinbo, a renowned domestic publisher and General Manager of Wan Rong Book Co. Ltd.
The 17-year old Forest Song Bookstore, which was one of the three largest private bookstores in Beijing, has not reopened after it announced a temporary suspension of business in July. President of the bookstore Wang Hongbin said that the store rent had surpassed 50,000 yuan ($7874) monthly, which was more than the business could sustain. He added that a combination of rising rents and fierce competition from online retailers had rendered his bookstore unviable.
Sun Chi of the O2 Sun Bookstore is also not optimistic. “Sales revenue has gone from bad to worse in the last four years. This year revenues have dropped 40 percent! It is now in a struggle to pay our managers,” he said.
In the meantime, the market share of online booksellers has continued to expand. In addition to Dangdang and Joyo Amazon, many new online vendors have entered the market. 360buy began selling books at the end of 2010. Liu Qiangdong, CEO of 360buy, said that sales of the online store’s books and audio and video products would be worth more than 500 million yuan ($78.75 million) in 2011.
Transformation
Facing increasing competition from online booksellers, traditional bookstores are trying to revive their businesses. Some bookstores have begun to provide diversified services and offer space for seminars, coffee and socializing in order to win over customers.
Many people who traveled Taiwan would visit Eslite Bookstore and buy some books. However, renowned Hong Kong scholar Ma Chia-hui said book sale could not make profits for Eslite Bookstore at all. It is mainly relying on selling other goods to survive. Ma himself is a book lover and frequent caller of the Eslite Bookstore.
Yu Zhenghui, public relations manager at the Xiamen-based bookstore chain Apodon, believes that if traditional bookstores want to be more successful, their businesses have to provide readers with something online retailers cannot furnish.
Apodon Bookstore, instead of just selling books, provides an area in which customers can relax with comfortable sofas, coffee and free Wi-Fi.
“Apodon wants to give people the sense of belonging to a community,” said Yu.“Online bookstores and Apodon are not in competition because our services are different, though our target customers are the same group.”
O2 Sun Bookstore also tried to establish itself as a social space but its efforts didn’t yield satisfactory results. The management found that customers began coming to the bookstore only to enjoy the pleasant atmo- sphere and did not purchase any books.
One Way Street Library in Beijing has adopted another means of survival. Every week, it holds two salons, inviting writers, singers, artists and directors to introduce their works. The salons attract more potential customers to the store but at the moment the bookstore’s sales revenues are barely sufficient to meet its costs.
Some bookstores have also resorted to setting up their own online bookstores. For example, Xooyo Book, the Guangzhou-based bookstore, provides their customers with a 30-percent discount if they purchase books online. However compared to the prices offered by major online retailers such as Dangdang and 360buy, the prices offered by Xooyo Book are not competitive. For instance, the original price of a set of Zhu Rongji Speech Record is 196 yuan ($31), while Xooyo Book sells it at 156.8 yuan ($24.7) online and Dangdang 147 yuan ($ 23.1).
Backed by abundant capital, big online booksellers can negotiate with publishers and secure an assailable advantage in the retail price war.
“Traditional bookstores such as O2 Sun Bookstore have to expand their businesses to survive, but they don’t have access to bank loans or other financing channels, and they don’t generate enough revenue internally to expand their business. That’s the reason behind the current troubles,” said Lu, the publisher.
Appealing for favorable policy
Currently, with more and more traditional bookstores facing closure, many booklovers and bookstore owners are calling on the government to adopt measures to save traditional bookstores.
In many foreign countries, the government provides favorable policies for traditional bookstores. For example, traditional bookstores are exempt from income tax in France; the Canadian Government provides half the expenses for the computer facilities of independent bookstores; the Japanese and South Korean governments have adopted policies which seek to establish fair competition between traditional bookstores and online retailers, wrote the eminent Chinese scholar Wu Zuolai in an article in The Beijing News.
Recently, Vice Minister of General Administration of Press and Publication Yan Xiaohong said in an interview that the government is planning to exempt some Xinhua bookstores operating at the county level and below from paying value added tax (VAT).
According to a report by China Daily, there are about 140,000 to 150,000 bookstores in China at present, among which 14,000 are state-owned Xinhua bookstores while most of the rest are privately owned independent bookstores.
The VAT exemption is good news for state-owned Xinhua bookstores. However the owners of private bookstores are keen to receive the same tax privileges.
“Our government invests a lot of money in building libraries every year. Actually, our bookstores are also a kind of library in some sense. In addition, bookstores can also help resolve employment pressures and contribute taxes. The government should help us reduce our current burdens,” said Chen, founder of Xooyo Book, on his microblog.