25 October 2016
By combining book and non-book businesses, Taiwan's Eslite is able to ward off competition in Hong Kong. Photo: HKdigit
By combining book and non-book businesses, Taiwan's Eslite is able to ward off competition in Hong Kong. Photo: HKdigit

Book retailing: Lessons from Eslite

Hong Kong is a good place for book lovers as the city boasts 21 bookshops per 100,000 people, the highest density of book stores globally.

Now we come to this question: how do the book stores thrive despite so much competition?

Taiwan’s Eslite bookstore, one of the most successful operators, just celebrated its fourth anniversary in Hong Kong this week. A look at its best-selling items will give us a clue about how the business model works.

Over the past four years, the shop’s bestseller has been “Big River, Big Sea: Untold Stories of 1949″, a book written by Taiwanese author Lung Ying-tai.

The title sold as many as 5,000 copies, bringing in HK$600,000 income for the store.

However, Eslite reportedly shells out HK$2 million in monthly rental for its 40,000-square-foot flagship store in Hysan Place in Causeway Bay.

It means that revenue contributed by the bestselling book is only enough to cover a week’s rent money.

Apart from “Big River, Big Sea”, none of the other four best-selling items are books. In case you are wondering, the four big revenue generators are Ten Ren Tea, mt Tape, Lamy pens and taro chips from Kaohsiung.

The Ten Ren Tea bubble milk tea is priced at HK$20 a cup. Eslite sold 2.18 million cups of those over past four years, reaping HK43.6 million in revenue. That’s equivalent to 73 times the sales of “Big River, Big Sea”.

Given this, can we say that it is Ten Ren Tea that is underpinning Eslite’s Causeway Bay shop?

Well, not exactly.

The reason why youngsters like to hang around at Eslite is partly because of its great ambience created by over 230,000 titles in the store and other attractions.

Many people like to go there and have a tea, a cake or buy some boutique items.

Certainly, the Taiwanese bookstore chain is widely known for being a cultural hot spot and a meeting place for young artists and those who appreciate cultural products, literary books and art.

Were it not for the store’s special appeal, people would have done their shopping online or gone to a place like Mong Kok for a drink, instead of paying premium price at Eslite.

Thus, we see how Eslite’s book business and non-book operations organically support each other to create a viable overall business.

Interestingly, a friend of mine has bought over 100 copies of “Big River, Big Sea” from Eslite over the years. The purchases were mostly done on behalf of his mainland friends.

The book tells the events of Chinese families that were broken up by the civil war, from perspectives of those who escaped to Taiwan. That makes the narratives quite different from the mainland’s propaganda.

As the book is yet to be approved for publishing in China, many mainlanders have opted to purchase the title from either Hong Kong or Taiwan to get a full picture of the history.

Such mainland demand is in fact a key factor behind the high book store density in Hong Kong. Many of them count tourists as major customers.

Not limited to politically sensitive titles, other books in traditional Chinese or English books published in Hong Kong and Taiwan are also highly sought-after by mainland Chinese. The city has become a key transit point to fill that demand.

Hong Kong bookseller Lam Wing-kee, who went missing last year and resurfaced after an eight-month detention in China, said he was told by officials to keep a record of people who buy banned books from his bookstore.

Coming back to my friend, I must say that he is very lucky as he has yet to face any problem despite sending several dozen copies of “Big River, Big Sea” to the mainland.

The recent controversy related to the detention of Hong Kong booksellers will hurt the business of sending banned books to mainland.

Nevertheless, more mainlanders may come to Hong Kong in person to buy the banned titles. So the impact of China’s censorship on Hong Kong’s book retailers will not be entirely negative.

This article appeared in the Hong Kong Economic Journal on Aug. 8.

Translation by Julie zhu.

[Chinese version 中文版]

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Hong Kong Economic Journal columnist

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