Bookstore days are numbered in China
More bookstores are closing down every year across China. Among the reasons include competition from online portals and government-run bookshop chains which enjoy tax benefits. The selection of books on China’s online portals has been doubling every year. More than 35 per cent of published books are now sold online. And with discounts of up to 50 per cent, it’s no wonder that less people are buying from bricks and mortar bookstores.
Mr Yin said: “The value of old books can appreciate by a few hundred or even thousand times. “The important thing is to understand that each book and edition has different value. You cannot follow the trend blindly (as) you won’t survive that way.” Evidently, not all have the resources to follow this business model. Tucked in a tiny corner of Shanghai’s former French concession, 1984 Bookstore is losing money every day. Its three owners forked out US$31,000 to set up the business last year. Two of them have gone back to their full time jobs in order to continue funding the shop. 1984 Bookstore owner Xu Zhi Ming said: “This is out of a very pragmatic consideration. “If all of us work in the shop and realise we have difficulties surviving, then we need to make some changes. “The main problem is the profit margin of books. “If we had margins like (the bookstores) in Hong Kong or Taiwan, it shouldn’t be an issue. But the books in the mainland are just too cheap.” Private bookstores with unique characteristics like an outdoor garden are increasingly rare in China. Among other challenges like high taxes and difficulty in getting bank loans, as the rent of an independent bookstore may be more than five times that of a government-run bookshop. Monthly rent alone is more than US$2,000 as compared to the profit margin of about a dollar per book.
Xu Zhi Ming said: “Many of the government-owned bookstores don’t even have to pay rent. Rent makes up about 70 per cent of our operating expenses (and) it’s a lot. If we didn’t have this cost pressure, of course we can survive.” Targeting different niche markets may be the only way out for these private bookstores such as incorporating a cafe into the environment. This concept helps make profits mainly from the food and drinks served, while customers enjoy free reading material. Other bookstores try to compete by offering more personalised service and experiences, such as Dukou Bookstore which only sells titles recommended by its owner.