29 November 2016

What’s Killing Hong Kong Bookstores?

Earlier this month, Page One unceremoniously announced the closure of its megastores at Harbour City and Festival Walk, ending the Singapore bookseller’s nearly two-decade stint in Hong Kong. The news came less than two years after Australian outfit Dymocks shut down its IFC Mall flagship and exited the city.

Reaction on social media to the loss of yet another bookstore chain was both immediate and damning. While some attributed Page One’s demise to competition from e-books and online retailers, many put the blame on the lack of a robust reading culture in Hong Kong. Still others pointed their finger at greedy landlords and the sky-high rent they extort from retailers.

But what really killed Page One? An autopsy is in order to examine the cause of death of the book industry’s latest casualty.

When will he go?

E-books
: The technorati have long prophesized the end of paper. Portable and affordable, Amazon’s Kindle and other e-readers are the physical book’s worst nightmare. But are they really?

After years of rapid growth in the past decade, e-book sales appear to have reached a plateau. In the UK, digital content sales fell nearly 2 per cent last year, while physical book sales grew in the same period. A similar reversal of fortune is happening in the United States, where industry experts cite “digital fatigue” as the primary cause of e-books’ gradual decline in popularity.

E-books have been even slower to catch on in Hong Kong, largely because not as many Chinese titles are available electronically. Contrary to common belief, they are not responsible for Page One’s death.

E-book sales have plateaued

Online retailers: Popular sites such as Book Depository and SHOPinHK boast free delivery and sizeable discounts – between 10 and 25 per cent. They offer convenience, savings and a selection that traditional bookstores find hard to beat.

Still, the two platforms cater to somewhat different customer groups: readers who already know what they want (usually international bestsellers) versus those who need to browse and be inspired. The latter are less inclined to make a purchase unless they can leaf through the pages or check out what else is on the shelf.

Store experience matters the most to buyers of children’s books. On weekends, many Hong Kong parents take their kids to physical bookstores where they can pick out a few choice titles, curl up on the carpeted floor and read the text out loud before taking them home as a treat. And so, while online retailers do peel away sales from traditional stores, the former can’t match the shopping environment offered by their brick-and-mortar counterparts. E-commerce did hurt Page One, but it didn’t mortally wound it.

They've come too late


Reading culture: The joy of reading is lost on most Hong Kongers. We tend to read for utility and not pleasure. That’s why investment manuals and travel guides outsell all other genres, whereas literature and fiction are the perennial underdogs. Chinese-language bookstores such as Joint Publishing (三聯), Commercial Press (商務) and Chung Hwa (中華) rely heavily on the sales of textbooks and exam aids.

Our reading culture has long been the bane of the publishing industry. Over the years, booksellers have evolved and adapted by expanding their product offerings to stay afloat. Eslite (誠品) and Bookazine, for instance, have carved out significant store space for stationery, snacks, toys and sundry paraphernalia.

So had Page One. Its Harbour City flagship resembled a small department store, complete with a restaurant and tea house. What’s more, the chain knew what it was in for when it opened shop in aliterate Hong Kong. It didn’t go out of business because its customers suddenly changed the way they read – because they didn’t.

Girls reading at Bookazine

Retail rent: We love to blame all social ills on the property market, and we do so for good reason. In Hong Kong, rent accounts for over 20 per cent of a retailer’s operating cost, nearly twice the industry norm overseas.

To understand the landlord-tenant dynamics, I spoke to Shonee Mirchandani, owner and managing director of Bookazine. To my surprise, she was quick to debunk the myth that commercial landlords are bloodsucking villains. “It’s simple supply and demand,” she said. “If a store space is overpriced, retailers will look somewhere else. At the same time, we don’t expect a free pass from our landlords just because we sell books. We are running a business and so are they.

The relationship between shopping malls and retailers are symbiotic: mall operators bring in foot traffic and they charge market rates for it. “Yes, rents are high in Hong Kong, but our costliest stores [in terms of monthly rent] are also our most profitable,” Mirchandani confessed. “There are many reasons why businesses fail. It’s not always the landlord’s fault. In fact, it’s often not.

Dymocks IFC no more


None of the above: The suite of market forces we have considered thus far – technology, reading culture and retail rent – affect the entire book industry. None of them explains why some players thrive while others flounder. Dymocks and Page One have both bitten the dust, but their competitors continue to grow. Eslite opened a second location at Star House last year and added a third in Taikoo Shing 10 months ago. Bookazine recently launched new stores in Repulse Bay and Discovery Bay. More branches are being planned.

The difference between success and failure boils down to the basic law of evolution: well-managed businesses survive and mismanaged ones don’t. Dymocks failed in Hong Kong in large part because the franchise was poorly run, according to an industry insider. The head office offered little support to the franchisees and set unrealistic turnover targets.

Page One, on the other hand, misread the book market. “They specialised in high-end art and architecture books and neglected non-fiction titles that Hong Kongers love,” said Pete Spurrier, owner-founder of Blacksmith Books. “Expensive art books are a niche market and it can’t really sustain a business.” As if to prove the point, Basheer Design Books in Causeway Bay announced this past weekend that they have decided to call it quits.

Eslite sells not only books but a lifestyle


Cash flow mismanagement is another common pitfall for booksellers – or any retailer for that matter.

Most businesses fail because they burn cash faster than they can make it. Dymocks owed millions to creditors when they folded. Page One reportedly spent over HK$20 million – money it hadn’t yet earned – on fitting out its sprawling Harbour City flagship. Now in receivership, the chain has left in the lurch scores of unpaid publishers, distributors, interior designers and contractors, according to local news reports.

Luck and timing also played a big part in sealing Page One’s fate. Its expensive renovation works coincided with the Chinese government’s crackdown onpolitically sensitive titles, which dried up a main source of its income. Shortly after the chain moved into Harbour City, direct competitor Eslite unveiled a multi-storey, state-of-the-art lifestyle megastore a block away at Star House, siphoning off both traffic and sales. At roughly the same time, Page One lost all six of its airport branches to Chung Hwa. The series of unfortunate events, all occurring at a time when the chain was most financially vulnerable, dealt a blow that precipitated its eventual death. Call it bad luck and bad timing.

So let the coroner conclude his post mortem examination with a few wise words from a bookseller who has beaten the odds. “Running a business is a gamble,” Mirchandani said. “You need both skill and luck. I’m driven by fear – the fear factor is what makes us adaptable and viable.


____________________________________

This article also appeared on SCMP.com.

As posted on SCMP.com


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    ReplyDelete
  9. Hi,
    I really appreciate your inputs on my situation Dr happy and what could I do with-out you. Thank you in advance.
    I was in a relationship with this guy for the past 1 and a half year.. We became close real fast and were very serious about each other… he’s German and was in the country for her internship.. he left after first 6 months and came back after a couple of months.. he said that he had come down for me.. WE started living – in.. We discussed faMILY, KIDS, future, moving to EU together.. everything was going good until of last August when I started to get jealous about his moves, I got controlling and things started to get worse.. we spoke about it a lot of times where he expressed how he felt but I was not able to understand why I was doing that.. During our discussion I would always say I did .. This February he called it off and since then I have been a mess.. I gave it a lot of thought and realised my mistakes and why I was doing it.. I tried talking to him .. begged him.. pleaded him .. but he says that he has lost all his feelings for me and would never get back to me..I was in my knees praying looking for help, them i fine a comment online how a spell caster help to restored relationship get ex lover back, ” so i decided to give a try coz i love my boyfriend so much. so i contacted Dr happy http://happyspelltemple.webs.com/ tell him all my problem and he gave me 100%guarantee that i will have my boyfriend back after the spell so i was gifted and lucky to have contacted him i did every thing he ask of me and to my greatest surprise a day after the spell my boyfriend call me and apology for what he did to me and ask for my forgiveness to come back again for me, we both are happily living together again plz Contact him urgently via.........
    happylovespell2@gmail.com
    or add him on whats-app +2348133873774
    Junia Noel from USA

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  10. I'm so excited to share this testimony on how i got my ex boyfriend back after a break up. I cant believe it! Dr .Goodluck your love spell casting really worked! My ex-boyfriend ( is now my boyfriend once again) sent me an SMS last Tuesday night, wanting us to get back together again...and here we are! Yes, we are back in each others arms once again. Everything is back to normal but this time our relationship is much more sweeter and much more serious and we are both committed to each other. I just want you guys to know how much I thank Dr .Goodluck! If you have any problem contact him and i guarantee you that he will help you., do not cry anymore, email him at: goodluck05spellcaster@gmail.com or Add him up on Whats-app: +2348138654465,you can also visit his website:http://goodluck05spellcaster.yolasite.com.

    goodluck05spellcaster@gmail.com
    whatsapp or call +2348138654465
    http://goodluck05spellcaster.yolasite.com

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  11. I was checking for solution in the internet then miraculously came Across Dr Miracle, the powerful herbalist that Cure Numerous individuals HSV-1 AND HSV-2 INFECTION,then i contacted his Email: (MIRACLESPELLHOME@YAHOO.COM) I Explained everything to him and prepared a cure that cure my HSV-1 AND HSV-2 Disease totally after receiving his Herbal medicine, So My friends viewers why wait and be suffer when there is someone like Dr Miracle,that can cure any disease HIV/ CANCER/ HEPATITIS B VIRUS, You Can "CONTACT Via : Email : (MIRACLESPELLHOME@YAHOO.COM) You Can Contact Him Today And Get Your Problem Solved Or"Call +2348071398555.." Or You Can Also Contact Him Through His Website http://miraclespellhome.webs.com/

    I Fix The Following Problems To All Across The Globe On
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