China’s Internet-famous bookstore in crisis: What’s the future of China’s physical bookstores?

The glory of Yan Ji You, a Chinese online celebrity bookstore, seems to have come to an end. The bookshop, integrating traditional reading experience with coffee culture and creative events, had once drawn a large number of young visitors out of its cultured setting and refined environment.

With people flocking to the brand’s local shops to take photos, Yan Ji You was once all-over social media, sparking a buzz amongst the younger generations for the lost art of books and bookstores.

But the page has now turned, with the brand recently having the second wave of store closures in major Chinese cities including Shenzhen and Guangzhou, not too long after ceasing operations in Beijing and Chengdu.

While the presence of the pandemic has inevitably played a part in affecting businesses like a bookstore, which is largely reliant on offline footfall, the brand is also facing internal problems that could be even more fatal to the business.

The brand is still in the hot water for being liable for unpaid wage, also partly down to the disruption of COVID, resulting in short of income. Moreover, rent has sped up the burning of the business. Being an Internet celebrity bookshop, Yan Ji You used to enjoy discounts in rent as the entering of a brand possessing huge online traffic can benefit the host too. However, such entitlement is now not available, leaving the company with increased costs in a time where profits have dwindled.

More concerning, however, is that bookselling is not the main source of income for the bookshop. It is understood that most of Yan Ji You’s visitors are young people who went there for photo opportunities, with few of them actually interested in purchasing books.

Although some might buy coffee drinks and participate in events at the shop, these activities do not contribute to the main income. According to Dan Jie, founder of Yan Ji You, bookselling only contributed to an average of 30% of the brand’s total revenue, while the majority of income was generated by coffee consumption and cultural events.

This business model could quickly face a bottleneck once visitors’ curiosity has been satisfied, if a photo opportunity has been captured there is little need to revisit. This issue has been coupled with challenges posed by COVID restrictions, limiting the shop’s capacity in running coffee service and organising events, resulting in a further loss of income.

Yan Ji You’s experience has brought the dilemma facing online celebrity bookstores to the surface. Despite their popularity online, how to convert that online traffic into consumption at physical stores is a question that needs to be answered. In the meantime, while enabling a diverse service as a way to engage with visitors, bookshops might also need to review their strategies to encourage more book purchases be it online or in-store. 

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