Once hailed as the "most beautiful bookstore in the world," Tsutaya Books seems to have suffered a Waterloo in the Chinese market. Back then, it was the benchmark in the hearts of countless Chinese bookstore practitioners. After entering China in 2020, it came with its own halo, and every store it opened quickly became a local internet celebrity check-in spot. However, since the end of last year, Tsutaya Books has successively closed three stores, first the largest mainland store in Xi'an, followed by the Tianjin store and the Shanghai Mo Hou store also announcing their closure.
It should be noted that Tsutaya Books once ambitiously planned to open 1,000 stores in China, but now it has entered a contraction stage after reaching only 15 stores. What happened behind this? Is the physical bookstore industry in China really going to fail?
Many people attribute the predicament of physical bookstores to the low-price competition of e-commerce, but things are not that simple. The reason why physical bookstores cannot survive is also due to the "promotion" of shopping centers, and behind this is the entire offline business in trouble.
E-commerce Impact: Started More Than a Decade Ago
In fact, the impact of e-commerce on physical bookstores has lasted for more than a decade. As early as around 2010, online book platforms such as Dangdang, Jingdong, Excellence, and Amazon quickly seized the market share of physical bookstores with their amazing low prices and convenient distribution. This directly led to the first wave of closures of domestic physical bookstores.
Bookstores that managed to survive can only struggle in the shadow of e-commerce. However, soon, practitioners in physical bookstores also figured out two ways out:
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Diversified Operation: Since selling books alone is not profitable, you have to find some profitable businesses to subsidize. Therefore, "bookstore + X" has become standard. The most common is "bookstore + coffee," and if it is more literary, add "bookstore + cultural and creative," and if you pay attention to sentiment, there may also be "bookstore + exhibition," "bookstore + salon," and so on. In short, the bookstore is no longer just a shop selling books, it must be a cultural space, a social place, and a third space where people can spend time. Moreover, the profit margin of coffee and cultural and creative products can usually reach 40% to 75%, which is much higher than the meager profit of books. Using these high-profit categories to subsidize the book sales business has become the key to the survival of many bookstores.
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Relying on Commercial Real Estate: After 2010, it happened to be the golden age of rapid development of domestic shopping centers. Various shopping centers sprung up like mushrooms. They needed some formats with cultural tonality, which could attract traffic and enhance the image of the entire shopping mall. Physical bookstores, especially those that are particularly beautifully designed and have the potential to become internet celebrities, have become popular. Many shopping centers are willing to give bookstores a large space in a good location, and give extremely favorable rents. Some only charge one-third or even one-tenth of the normal rent, and some simply waive the rent. Of course, real estate developers are not philanthropists. What they want is that bookstores can attract groups with more spending power, higher education levels, and more youth and vitality to the shopping center. These people will eventually consume and realize value in other parts of the mall, especially for middle-class families with children, the attraction of bookstores is huge, after all, a considerable part of China's book market is children's books and teaching aids.
Relying on these two paths, some physical bookstores finally breathed a sigh of relief in the face of the low-price offensive of e-commerce. Although they may not live very well, they will not die. Even chain bookstore brands such as Single Street and Yan Ji You, relying on new formats, once had a highlight moment of reverse expansion. It can be said that from 2010 to around 2020, for about 10 years, the physical bookstore industry finally formed a fragile commercial balance after being battered by storms.
Balance Broken: E-commerce Takes Another City, Shopping Centers "Change with the Wind"
So, how was this balance broken?
First of all, after 2020, people's consumption and entertainment behaviors have further shifted online. If Dangdang and Jingdong were a precise blow to physical bookstores more than ten years ago, then in recent years, supply chain e-commerce represented by Pinduoduo and live e-commerce represented by Douyin have almost indiscriminately swept the entire offline retail format. They used more extreme low prices, more direct factory-to-consumer links, and more sensational live recommendations to squeeze a large share of offline retail.
The offline share of clothing, beauty, electronics, sports, and other major categories that originally supported the commercial income of shopping centers has shrunk across the board. "When the skin ceases to exist, what will the hair adhere to?" When the entire offline retail market is shaking, it is difficult for the hair of bookstores to be alone.
And when offline retail began to experience a crisis, the shopping centers that used to transfuse blood and续命 to bookstores also began to change their strategies. The investment managers of shopping centers have discovered that catering has now become the pillar, after all, everyone can choose not to buy things offline, but it is unlikely that they will not eat offline at all? So we see that the small catering in B1 and B2 has become the traffic center of the shopping center, and the large catering that used to shrink on the fifth floor and above has begun to open stores in the golden spots on the second and third floors. Although catering used to be a secondary traffic-generating format for shopping malls, catering can now contribute real revenue and rent, and in such a large environment, shopping centers are also willing to give them some discounts, at least to fill the empty shops.
Bookstores are different, this is a real sentimental format. When the market was good in the past, giving bookstores rent-free and low rent, in order to decorate the facade and enhance the cultural atmosphere, now "the landlord's family has no surplus grain," the requirement for the rental return rate of each store is increasing, and naturally it is impossible to continue to transfuse blood to bookstores as before.
The most important "blood bag" suddenly stopped supplying blood, how can the bookstore industry not fall into a deeper predicament?
In addition, the diversified business model of "books + cultural and creative products + coffee" that bookstores have found themselves is also facing challenges. In the coffee section, a latte in a bookstore that cost 30 or 40 yuan a few years ago could still attract many people to pay for the atmosphere, but now, Luckin and Coulee have stirred up the market with 9.9 yuan coffee, and even Starbucks has to put down its posture to do promotions. Even independent boutique coffee shops, a latte costs only a little over twenty yuan, and the coffee in bookstores is difficult to compete with these brands that specialize in coffee, whether in terms of price or professionalism.
As for cultural and creative products, in the early years, some bookstores would sell cultural and creative products such as handbooks, calendars, postcards, stationery, and refrigerator magnets. There have also been many internet celebrity products, such as the Single Street Bookstore's Single Street Calendar once sold very well. But the problem is that there are actually not many bookstores in China that have the content output ability of Single Street, and cannot give more content and IP value to cultural and creative products. Without IP and content value, premium is out of the question. These cultural and creative products in bookstores are no different from the small souvenirs produced in Yiwu sold in scenic spots, and they are everywhere on Taobao.
So in recent years, some bookstores have realized that instead of spending a lot of effort to develop some cultural and creative products that cannot be sold, it is better to directly cooperate with some trendy toy brands and some valley brands, and turn themselves into sales channels for products such as blind boxes, cards, acrylics, and badges, simply earning a channel fee.
But in the final analysis, the cultural and creative business is only a cross-border walk, improving the profit statement, and if you really want to make money from this, you would have transformed and opened a cultural and creative grocery store or joined MINISO long ago.
Bookstores do not make money, so offline retail needs to subsidize the rent. And when e-commerce swept the entire offline retail landscape, it conveniently pulled out the last oxygen tube for the bookstore industry that was already lying in the ICU.
The "Unsuitability" of Tsutaya Books
Here we can talk about Tsutaya Books. In fact, the culmination of the so-called "books + cultural and creative products + coffee" model is Tsutaya Books. The reason why Tsutaya can become one of the most successful chain bookstore brands in the world, making half of Japan its members, is that it does not just sell books, but sells various commodities with books as clues and core, and turns itself into a cultural complex.
Next to design books, there may be designer brand clothing; next to animation books, there may be animation valleys; next to music magazines, CDs and DVDs are sold directly; next to tableware, food books are interspersed, and so on. In addition, various works of art, perfumes, and cultural and creative products can also be found in Tsutaya. The company has never positioned itself as just a bookstore, but as a "lifestyle proposal store," that is, creating a place where people can enjoy a wonderful life, and recommending various interesting lifestyles to consumers in the process. The result is that Tsutaya not only grew bigger, but also promoted the commercial formula of "bookstore + cultural and creative products + coffee" to the entire industry.
In 2020, Tsutaya officially entered the Chinese mainland market with the halo of "the most beautiful bookstore." Choosing this point in time, Tsutaya was somewhat in the mood to bottom out, because at that time, the domestic offline business had shown signs of downturn, rents began to decline, and the intensity of competition seemed to be decreasing.
But the problem is that when Tsutaya entered the Chinese market with great ambition, the commercial formula of "bookstore + cultural and creative products + coffee + lifestyle" on which it relied for success was on the verge of collapse in the Chinese market. Its Chinese disciples, such as Fang Suo and Yan Ji You, which were once popular, and Eslite Bookstore, which entered the mainland market earlier, successively fell into trouble and began to scale back or even close stores on a large scale from around 2020.
These brands are all imitators, inheritors and improvers of the Tsutaya model. The problems they encountered, such as low ping efficiency, over-reliance on non-book business, core book sales still sluggish, and difficulty in bearing high operating costs, Tsutaya cannot escape any of them.
Most of Tsutaya's stores in China adopt a light-asset model of cooperation with local commercial real estate companies. The Chinese side is responsible for the actual operation and investment, and Tsutaya provides brand design and consulting, not the actual investor. Under this model, if the store performance is not good, or the partner itself is in financial trouble, the fate of the bookstore is in jeopardy. The direct reason for the closure of Xi'an Tsutaya Bookstore is that the partner Maike Group itself fell into an operating crisis. Even if the Japanese side does not want to close the store, it does not have the final say.
Therefore, the ending of Tsutaya's closure can be said to have been foreshadowed from the moment it chose to enter China. The reason why it still seems to be able to maintain a certain decency is largely because its brand value is higher than that of its domestic counterparts, and it entered China later, and the value of the internet celebrity has not completely dissipated. But these intangible values will eventually gradually fade away with the passage of time. When consumers' freshness passes, when the craze for checking in and taking pictures subsides, if the bookstore itself cannot provide continuous and attractive value, then the ending may not be much better than its apprentices.
Physical Bookstores, Are They Really Hopeless?
Returning to the entire bookstore industry, is the business of offline physical bookstores really unsustainable? I think it is very likely that this is the case. There are many superficial reasons for the problems of physical bookstores, such as the impact of the epidemic, the crushing of e-commerce, and the failure of business models. But digging deeper, there are more fundamental problems.
The first and most heartbreaking one is that in this era, there are indeed fewer and fewer people who read, especially those who read paper books. This is not just a problem in China, but a global trend. Various data show that people's average reading time is decreasing, entertainment methods are becoming more diversified, and the priority of books in people's lives is constantly shifting backwards.
Just like the famous assertion of Tsutaya founder Muneaki Masuda: "The problem with bookstores is that they sell books." You can't force people to accept things they don't like at all.
When I was a child, in that era, spiritual entertainment was still relatively scarce. There were only a few channels on TV, and there was no Internet or smart phones. At that time, reading was not only a way for people to acquire knowledge and improve their aesthetics, but also an important form of entertainment and pastime.
But with the great enrichment of movies and TV, especially the emergence of the Internet, books suddenly seemed less fun. And now, the emergence of short video media is almost a "deadly kill" for books.
Short videos are almost on the opposite side of books:
| Characteristic | Short Video | Book |
|---|---|---|
| Form | Short and fragmented | Requires a certain length and complete structure |
| Sensory stimulation | Directly stimulates the senses with concrete images and sounds | Abstract text media, requires readers to actively construct and imagine |
| Content | Pursues timely hot spots and high information density | Carries knowledge and thinking that has been precipitated |
| Satisfaction | Pursues immediate satisfaction | Requires focus and investment |
| Threshold | Almost no threshold | Requires a certain reading ability and patience |
The most deadly thing is that short videos are countless times stronger than reading in terms of entertainment and in catering to human nature's pursuit of immediate satisfaction. Watching short videos requires almost no threshold, and reading, especially reading in-depth books, requires focus and investment. In comparison, reading is no longer an easy pastime for many people. If it is not for exams, for work, for acquiring specific information and knowledge, or for developing a career, many people may feel that reading is an unnecessary and self-inflicted thing.
When reading itself no longer has universal appeal, the foundation of the bookstore business will naturally be shaken.