Robert Wu Ching-yu, founder of Taiwan’s famed Elite Bookstore, died of heart failure on Tuesday night.
Wu created a new business model for the struggling bookshop business and his company, once suffering from chronic losses, is now making decent profit and is worth nearly NT$9 billion (US$295 million).
His “Cheng Pin model” transformed the traditional bookshop into a lifestyle emporium. While books remain its core product, Eslite makes most of the money from selling tea, ice cream, stationary products and fashion goods.
With its amazing ability to attract customer traffic, Eslite would usually lease large areas from operators of shopping malls and re-let to smaller retailers of those high-margin products at higher rents.
Similar products such as tea might be available at much lower prices in street stalls, but customers reportedly prefer to come to Eslite, an iconic destination in their eyes, to enjoy a drink or whatever amid a sea of books and in a soothing atmosphere.
However, its unique business model has also drawn some criticism. It’s blamed for doing business in dining, retail and property under the cover of books.
But without those profit centers, Eslite won’t be able to offer its huge collection of titles and give book lovers a nice place to gather.
It wasn’t all that smooth in the beginning.
Wu founded Eslite in Taipei in 1989, with its first bookshop in Taipei’s Daan District. The bookstore suffered losses for the first 15 years, since Wu insisted in selecting pure literature, arts and architecture books, rather than selling popular books for profit.
Wu also refused to promote sales with discounts. Slowly, the bookstore has built up its reputation among artists and writers. Later, it also attracted investment from several Taiwanese entrepreneurs, including Acer’s founder Stan Shih and Asus founder T.H. Tung.
Eslite undertook a reform in 2005 and gradually established its new business model.
The company was listed in Taiwan in 2013, and now it has a market cap of NT$8.9 billion. Its sales revenue grew 11 percent to NT$4.2 billion last year, while net profit rose 2 percent to NT$420 million.
In 2012, Eslite came to Hong Kong to open its first store outside Taiwan. There are now three Eslite stores in Hong Kong.
Last year, the Hong Kong market contributed NT$610 million of revenue, up 150 percent from the year before. The three Hong Kong shops generated a combined pre-tax profit of NT$110 million. Green tea and ice cream are said to be some of the best-selling items.
Eslite also opened its first mainland store in Suzhou in Jiangsu province, and sold 292 apartments under the brand of Eslite Residence. The luxury property project sold units at 65,000 yuan (US$9,610) per square meter, demonstrating how Eslite has successfully monetized its image as a symbol of culture and taste.
It’s a great pity that Wu has passed away. He reportedly had chronic heart conditions and had undergone three surgeries since 1988. He had long passed the helm to his daughter Mercy Wu, and she has been doing a fine job running the company.
It is said that Eslite is considering to expand into Japan, the United States and Europe as well.
This article appeared in the Hong Kong Economic Journal on July 20
Translation by Julie Zhu
[Chinese version 中文版]
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