How do physical bookstores survive the digital age?

This is a small segment from the weekly literary program Ink&Quill.

The bookstore Colourful used to be a cafe sitting beneath Chinese writer Eileen Chang's former residence. [Photo: China Plus]

Located in downtown Shanghai, "Colourful", or "Qian Cai Shu Fang" in Chinese, is one of the most iconic bookstores in the city. 

Sitting right beneath the former residence of Eileen Chang, the legendary 1940s Chinese writer, the bookstore used to be a cafe that she frequently visited. In order to pay homage to this cultural icon, the coffee house turned into a tastefully decorated bookstore stacked with Eileen's books. 

Coming all the way from Wenzhou in Zhejiang Province, a city over 450 kilometres from Shanghai, college students Zhang Hanqi and her friend came to the bookshop to salute their literary hero.

Colourful is stacked with Eileen's books.[Photo: China Plus]

But rather than taking a stroll around the bookshelves, the pair poses for pictures beside almost every Eileen Chang's portrait inside the bookshop.

Zhang explains as: "I am mostly interested in the decor of the bookstore. Since I am a design major, I just want to experience the atmosphere."

Her comment might touch on a long-standing problem that worries many bookstore owners. As people's buying habits change, it seems that books are no longer the primary draw for prospective customers.

Book is no longer the sole merchandise sold in brick-and-mortar bookstore.[Photo: China Plus]

Shang Hua runs Dayin Books, an independently-owned bookstore chain in Shanghai. According to her, book sales only account for half of our profits."The other half comes from selling tea and tea sets. We have three outlets in Shanghai. In the flagship store, we organize reading events and activities. So on-site leasing also accounts for a portion of our revenue. All the stores provide similar services. However, since the flagship store is located in a modern shopping mall which attracts a younger crowd, we host some workshops there. Here, since this store sits amid neighborhoods, there are calligraphy and baking classes on offer."

A snapshot of Dayin Bookmall. [Photo:China Plus]

Hold on a moment, so does this diversification suggest a dwindling number of book lovers? 

Shang immediately denies this:"In fact, a genuine book lover would still purchase a sizeable number of books. There are still many of them."

But the bookseller also admits that solely depending on book sales cannot guarantee their survival. The cost of running a book store can be quite high. Shang continues:"We would only earn several thousand yuan per day if we only sold books. Those who merchandise nothing but books cannot make ends meet. You have to offer customers something else."

Visitors are seldom found during workdays.[Photo: China Plus]

According to Zhang Lin, deputy-general manager of Heilongjiang Book, Audio, and Video Distribution Group, though the Chinese book retail industry is thriving in general, the number of physical books sold is in decline. 

Zhang says: "Online bookselling has maintained a growth rate of 30 percent. In 2016, the total retail sales of books in China was 70.1 billion yuan, roughly 10.5 billion US dollars. Physical bookstore accounted for 33.6 billion yuan whereas online retailers pocketed 36.5 billion yuan. For the first time in history, digital sales outnumbered brick and mortar sales. Judged by last year's statistics, the state of the physical bookstore is quite grim."

During the 2017 Shanghai Book Fair,industry insiders across China gather together to discuss how physical bookstores transform amidst the cut-throat competition with online retailer on August 17,2017. [Photo: China Plus]

In order to survive, bookstores have had to transform. Even Xinhua, China's 80-year-old state-owned bookstore chain, is planning on getting a face-lift.

Here is Jiang Li, deputy-general manager of Shanghai Xinhua Media Company Limited. So far, her company owns nearly 100 stores around the city. By the end of this year, three more are ready to make their debut. 

"I think independent bookstores are more market savvy. We need to learn from them in order to meet the needs of customers. That's why our three new outlets will go through some transformations. Before, at the mention of a Xinhua Bookstore, people would usually think of almost-tipping bookcases cluttered with student reference books and test prep books. It seemed like there was nothing new on the shelf throughout the year. But our newly-built outlets will be different and improve the customer's experience. We will make the purchase more convenient and the in-store stock more up-to-date. At the same time, an in-house cafe will be installed as well."

A man enjoys his reading in Jic Books of Shanghai.[Photo: China Plus]

Yet not everyone in the industry is interested in venturing further into a diversified business.

In Sichuan Province, Winshare, a subsidiary of the behemoth Xinhua, is embracing digitalization by opening a new set of data-driven smart bookshops. 

Chen Dali, deputy general manager of the company, introduces: "There are two types of bookshops: one is self-service bookshelf whereas another is a self-service bookstore. Their difference lies in size. But no matter what sort of bookshop we are talking about, both forms offer customers similar services, such as book selling, lending, and information gathering. All you need to do is to register on our platform. One smart bookshop won't occupy a large space. Take the self-service bookshelf for example, it only covers 2 to 3 square metres but contains over 500 volumes. Even if the books on the shelf cannot meet your needs, through our smart terminals, you could find inventory information from our storefronts or local libraries. The data-driven stores are multifunctional."

According to Chen, so far there are fifty smart bookshops scattered across Sichuan. In the future, more will be established in neighbourhoods, shopping malls, and transportation junctions across China. As the number of their outlets increase, his company Winshare could create a big data digital apparatus that collects information on consumption habits, and other customer information. 

Some fans compare the decor of Jic Books with J.K.Rowling's Hogwarts.[Photo: China Plus]

Cao Jie, the head of Anhui Xinhua Media, also agrees that the tie-in of brick and mortar shops and digital prowess, marks the future for book retailers. 

"We develop a new business model by launching an app named 'U Plus Bookstore', which basically allows people to borrow books in bookstores. Within ten days, readers can use the app to borrow whatever they like, by paying 99 yuan or roughly 15 US dollars as a deposit. Reading has changed from a personal experience into a social activity. The three million users on the digital platform, are divided into different reading groups. From time to time, we will analyze our users' reading scales then connect them with various products, publishers, and authors. If you return the borrowed books on time or read voraciously, financial benefits will also be provided."

Cao says that book lending is just the first step of their transformation. In the future, they will work with online education institutions in order to offer more services. The man adds that "Within 30 days, the average weekly attendance has increased by 53 percent. More than 120,000 books have been borrowed and returned. As an added bonus, the revenue of our physical bookstore is increasing at the same time."

Readers stroll around a bookstore in Shanghai.[Photo: China Plus]

That sounds quite promising, doesn't it? 

But this brandnew business model is not being carried out unchallenged. 

Since 2016, Chinese online retailing juggernaut Dangdang has opened more than one hundred brick-and-mortar bookstores. The e-commerce giant is scheduled to open one thousand storefronts in the next three years. 

It seems that the future for physical bookstores remains murky and challenging.