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UPDATED: November 28, 2011 NO. 48 DECEMBER 1, 2011
The Disappearing Bookstore
Traditional bookstores face challenge
By YU LINTAO
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TRYING TO SURVIVE: A bookstore in Guiyang, capital of southwest China's Guizhou Province, tries to attract young readers with children's bestsellers (LIUXU)

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 atmosphere 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.

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