When was the last time you went to Xinhua Bookstore?
Or for today's young people, it is no longer common for physical bookstores to read sample books for readers, which can be called "feelings". But more than ten years ago, Xinhua Bookstore was a utopia where you could rub books and air conditioners for free.
When Internet celebrity physical bookstores such as "Yanjiyou", "Cat's Sky City" and "One-Way Space" are in trouble, Xinhua Bookstore, which looks deserted, is still standing, and even has more than 100,000 employees all year round. With a stable career and work content, he has become a "fairy employer" in the eyes of job seekers.
Why is it that at a time when the physical book industry is declining and Douyin Kuaishou Fragment Entertainment is dominant, Xinhua Bookstore can maintain an income that far exceeds that of its peers in other bookstores, and can even expand its stores against the trend and blossom everywhere?
Xinhua Bookstore, edited by state-owned enterprises
As a "business miracle", Luckin Coffee will only reach the level of more than 10,000 stores in 2023[1], and as of 2022, there are a total of 13,531 Xinhua bookstore outlets in the country[2]. How can the store of Xinhua Bookstore be as everywhere as Luckin?
China is one of the countries with the largest number of bookstores in the world, and "Xinhua Bookstore" is the largest state-owned bookstore chain brand. The headquarters of Xinhua Bookstore, Beijing Xinhua Bookstore, is managed by China Publishing Group Corporation. However, in terms of overall structure, Xinhua is not like the general state-owned enterprises directly managed by the upper and lower levels.
Nowadays, the signboards of each branch are the trademark of "Xinhua Bookstore" that we are familiar with, but it is not under the control of Xinhua Main Store.
Since 2002, the China Xinhua Bookstore Association has been responsible for the brand management of "Xinhua Bookstore", and all users of the Xinhua Bookstore trademark across the country are members of the association [3]. The association is responsible for the brand promotion, coordinated development and maintenance of systemic rights and interests of Xinhua Bookstore.
Although they are all "national prefixes", there are more than 40 Xinhua bookstores operating behind bookstores in all provinces and regions across the country[4], and it is really difficult for ordinary people to distinguish between them: Shanghai Xinhua is generally called "Xinhua Media", Sichuan Xinhua is "Xinhua Winshare", in addition to "Phoenix Xinhua", etc., but the eldest uncle and second uncle are both uncles, and they are all "Xinhua" in the national team.
This pattern of total score network operations did not exist from the beginning. Initially, Xinhua Bookstore was born in a grotto in Yan'an, and has been in business for 87 years now.
After the founding of the People's Republic of China, Xinhua bookstores across the country relied on supply and marketing cooperatives to establish a rural book distribution network. At the counter of the enamel basin, candy, and cloth of the supply and marketing cooperative, there is always a corner belonging to the book. Like the Xinhua Dictionary, the name "Xinhua" means New China[5].
In 1987, the head office of Xinhua Bookstore was "upgraded", and it merged with the Beijing Distribution Office of Xinhua Bookstore and Xinhua Bookstore Storage and Transportation Company into an economic entity and became a first-class book distribution enterprise.
Since then, the relationship between the head office of Xinhua Bookstore and Xinhua bookstores in various regions has been transformed into a business relationship, and in the process of restructuring, it has gradually become a pattern of Xinhua entities operating bookstores in various provinces [5].
Although they are in their own positions, there are still rules to follow. Xinhua bookstores across the country have different names: the general branch is "Xinhua Bookstore"; In provincial capitals or important cities, there will be "Xinhua Book Center" or "Xinhua Book City"; In Macau, it operates under the name of "Zhuxin Book Company".
The online ** operating entity Xinhua Internet E-commerce*** is invested and co-built by 31 provinces (autonomous regions and municipalities) Xinhua bookstore operators across the country [6], and the equity ratio is determined according to the market share of Xinhua Bookstore Group in each province and city.
Don't make money from the few books you buy
According to the "Social Responsibility Report of China Xinhua Bookstores (2022)" released by the China Xinhua Bookstore Association[7], in 2022, the total assets of Xinhua bookstores in China were 2,4801.2 billion yuan, a year-on-year increase of 414%；Profit after tax 1322.9 billion yuan, a year-on-year increase of 1109%。
In the first half of 2020, China's brick-and-mortar store sales fell by 47% year-on-year36%[8], and the number of offline market sales in 2022 will decrease by 18 year-on-year66%[9]。And Xinhua Bookstore has been growing against the trend, what does it rely on? Sell books?
One of the core businesses of Xinhua Bookstore is the publication and distribution of textbooks and supplementary materials. Taking Xinhua Winshare as an example, this part of the business accounts for more than 80% of its revenue, of which the gross profit margin of teaching and auxiliary publishing can reach about 45% [10]. It can be said that since you received compulsory education, you have been a customer of Xinhua Bookstore.
The distribution of teaching materials and teaching aids has high barriers to entry and is a real non-market-oriented competitive field. In this business alone, Xinhua has the right to win.
In addition to the publication and distribution of books, Xinhua Bookstore's distribution outlets and channel network also have first-mover advantages. Therefore, the Xinhua online shopping experience is a bit like Uniqlo, you can place an order online at any time, and then the system will automatically identify it according to the delivery location specified by the reader, and the delivery will be delivered by the Xinhua bookstore store closest to the reader.
Therefore, some provinces have even developed logistics business, for example, the revenue of Xinhua Bookstore in Anhui Province can reach about 25% of the revenue [11], becoming the first echelon logistics enterprise in the province.
Rent is obviously the biggest pressure on bookstores' operating costs, accounting for almost 50% of the total costs. Beijing's One Way Street Bookstore once needed crowdfunding to ensure that the rent and property would not be cut off from default[12]. Even Yanjiyou Bookstore, which has raised more than 200 million yuan, will become an "old man" who can't afford to pay rent in 2022 [13].
The construction of Xinhua stores is different, because they were originally public institutions, so their stores, as public infrastructure construction, are often self-owned real estate [14]. Secondly, it also enjoys the state rental subsidy. Because of the brand advantage, there is also a high negotiation capital in the face of the property.
In addition to the large amount of office space available for rent in the building[15], the Xinhua bookstore sells learning machines, electronic dictionaries, calligraphy and calligraphy outside the bookstore, and is also rented by Xinhua Bookstore. The rent of the booth is also a large income for Xinhua Bookstore.
Moreover, the broken Xinhua bookstore in your impression has changed - trendy stores, peripherals, and cultural and creative products are emerging in an endless stream.
The only bookstore in Shanghai, known as 1925 Bookstore, which has been open for nearly 100 years, is the Red Bookstore built by Shanghai Xinhua Bookstore[16], which is also the place where Lu Xun often came to collect manuscript fees. It has no resemblance to the "Xinhua Bookstore" in its impression, and it is already a must for Shanghainese Citywalk.
The "Backlight 226", which has the theme of public welfare for the disabled, is a "small but beautiful" bookstore famous for its barrier-free design and humanistic care. The Xinhua Bookstore in Hohhot is known as the "Hogwarts of Hohhot" by netizens.
The Xinhua liquor and coffee, Xinhua dictionary creative cakes, cultural and creative ice cream, and letterpress postcards sold in the bookstore have all kinds of money that should be earned [17].
Continue to expand, from street corners to the world
As mentioned earlier, the operation of Xinhua bookstores across the country is the responsibility of dozens of different Xinhua entities, and the relationship between the head office and Xinhua bookstores in various places is only business contacts. The Xinhua head office and the overseas Xinhua bookstore belong to the China Map Group, which is currently the largest publication import and export company in China.
The China Publishing Group, the company behind the Group, is very strong, and its main bookstore brands include: Life, Reading, New Knowledge, Xinhua Bookstore, People's Literature Publishing House, Commercial Press, Zhonghua Book Company; Even the Encyclopedia of China Publishing House, the People's Fine Arts Publishing House, and the People's ** Publishing House are its brands [17].
With this pattern, Xinhua Bookstore can be said to be blooming everywhere, running out at home and abroad.
Therefore, overseas Xinhua bookstores have strong support behind it, and its textbook business targets not only domestic students who receive quality education, but also children who receive Chinese education overseas, such as North America [17].
As a "prince going to sea", Xinhua Overseas Development has two-way support from policy resources, for example, the location of Xinhua Bookstore in London is the property purchased by Zhongtu many years ago, which saves major real estate expenditures [18].
Xinhua Bookstore located overseas was originally built in the densely populated Chinatown area, whether it is Brooklyn and San Diego in New York, London, or Melbourne, Australia.
The export of textbook culture depends on Xinhua - overseas students may not have "five-year college entrance examination, three-year simulation" in their hands, but tiger mothers will definitely be able to buy the textbooks they need in Xinhua bookstore.
They not only sell books, but also sell a variety of snacks, catering, cultural products, and even some large-scale overseas stores have also launched Xinhua Express, which has won the hearts of Chinese people at home and abroad.
As for the domestic Xinhua Group, some have become listed companies, and some are on the way to be listed.
Since July 2002, the General Administration of Press and Publication of the People's Republic of China has implemented the policy of shareholding reform for Xinhua Bookstore (Distribution Group), and selected Shanghai, Zhejiang, Jiangsu, Liaoning, Sichuan, Fujian and other provincial-level Xinhua Distribution Group as pilot units. It aims to use market-oriented means to standardize and optimize the operating model of Xinhua Distribution Group.
For example, Xinhua Media in Shanghai [19] is the only listed company under the Shanghai Poster Group and the only company authorized to use the "Xinhua Bookstore" trademark in Shanghai. It became the first unit in the Xinhua system in China to successfully implement property rights reform and go public.
Sichuan Xinhua Bookstore, also known as Sichuan Xinhua Distribution Group, and its Xinhua Winshare was also successfully listed in Hong Kong a few years later. Business is still growing in many provinces, and Xinhua's expansion continues.
This also explains why the store is often full of children sitting and lying down reading books, just reading and not buying, and Xinhua Bookstore doesn't care. As perhaps the largest entity in the childhood memories of the killing, compared to us who are exhausted, Xinhua Bookstore is "getting older and more pretty".