Is Xinhua Bookstore Actually Profitable?
Nowadays, the business of physical bookstores is not doing well.
However, there seems to be one exception, and that is:
In most people's impressions, Xinhua Bookstore is large in size, comprehensive in book selection, and quick to stock new releases.
Moreover, it has heating in winter and air conditioning in summer.
The key point is that both adults and children can read books for free without time limits.
Therefore, many netizens wonder: How does Xinhua Bookstore actually make a profit?
Some even worry: If no one buys anything, could such a great store gradually disappear?
Xinhua Bookstore carries the cherished childhood memories of many of us.
So, what kind of magical existence is Xinhua Bookstore?
"Could Xinhua Bookstore collapse suddenly like other bookstores?"
Such concerns are not unfounded. Over the past two years, more than a thousand bookstores nationwide have closed or been sold.
In just the first half of 2023, the once-popular online-famous bookstore "Yanjiyou," which had raised hundreds of millions in funding, closed almost all its stores nationwide and was embroiled in a "wage arrears scandal."
The Zhongshuge Jing'an branch, hailed as Shanghai's "most beautiful bookstore," has also quietly shut its doors.
The once highly popular online-famous bookstore "Yanjiyou" closed nearly all its locations.
However, Xinhua Bookstore has not only survived but thrived.
This makes many people curious: With so many customers who "only read but don’t buy," can Xinhua Bookstore really turn a profit?
For comparison, let’s look at Dangdang, a major player in online book sales. According to its disclosed data, in 2020, Dangdang's revenue was just over 10 billion yuan, with profits around 400 million yuan, 70% of which came from book sales.
In the same year, Xinhua Bookstore nationwide reported revenue of 129.16 billion yuan, total assets of 213.422 billion yuan, and profits of 10.557 billion yuan, comparable to the revenue of several leading listed companies and completely overshadowing Dangdang.
Although the offline stores of Xinhua Bookstore were affected by the pandemic in recent years, leading to declining revenue, its online-focused subsidiary, Xinhua Winshare, still achieved revenue of 10.93 billion yuan, a year-on-year increase of 4.49%, with net profit attributable to shareholders of 1.397 billion yuan, up 6.95% year-on-year.
So, how has Xinhua Bookstore managed to stand strong for so many years?
The ever-unchanging red signboard with white characters of Xinhua Bookstore has long been etched into people's DNA.
This brings us to the past and present of the "Xinhua Bookstore" brand.
Xinhua Bookstore is now 86 years "old" since its founding.
In early 1937, its predecessor, "Xinhua Publishing House," was born in a cave of the Wanfo Cave on Yan'an's Qingliang Mountain, shouldering the mission of book publishing and distribution ever since.
This publishing house mainly worked on publishing and distributing Liberation, the theoretical journal of the CPC Central Committee at the time, with many Party leaders contributing to the magazine.
The former site of Xinhua Bookstore at Wanfo Cave on Yan'an's Qingliang Mountain.
In October of the same year, Xinhua Publishing House was officially renamed "Xinhua Bookstore," a name that has been used ever since.
The four characters "Xinhua Bookstore" were personally inscribed by Chairman Mao, undergoing several revisions to become the version we see today.
In its early days, besides printing political publications, Xinhua Bookstore was also responsible for producing military maps, stamps, and other supplies, operating in a "dual-use" model for both military and civilian purposes.
During wartime, the growth of Xinhua Bookstore was closely tied to the Party's guiding principles.
Before liberation, the Chinese people, lacking cultural education, lived in confusion and disarray.
To change this, it was necessary to spread advanced ideas and arm minds with knowledge, leading Xinhua Bookstore to flourish amid the flames of war.
Back then, whenever a revolutionary base was secured, four facilities were immediately established: a bank, a post office, a supply and marketing cooperative, and a Xinhua Bookstore.
Hence, the slogan at the time was: "Wherever there is a revolutionary base, there is Xinhua Bookstore. Wherever there are people, there is Xinhua Bookstore."
In 1953, after the founding of New China, Xinhua Bookstore published the Xinhua Dictionary, a reference book that influenced generations, to support the nationwide literacy campaign.
Different editions of the Xinhua Dictionary since its publication.
Following Premier Zhou Enlai's suggestion, to ensure affordability, the Xinhua Dictionary has always been sold at the lowest price, currently equivalent to the price of a pound of pork in the market.
As one of the best-selling "blockbusters" of Xinhua Bookstore and China's publishing market, by July 2015, the dictionary had sold 567 million copies worldwide, earning Guinness World Records for "Most Popular Dictionary" and "Best-Selling Book."
It can be said that Xinhua Bookstore has played an indispensable role in popularizing knowledge and raising cultural standards.
Thus, though it may appear "rustic," Xinhua Bookstore is far more profitable than you might imagine.
After the reform and opening up, the Xinhua Bookstore, which carries the memories of generations, underwent a series of reforms. In the early 1990s, local Xinhua Bookstores gradually separated from the headquarters and independently explored development models on a provincial basis.
After so many years of development, how many Xinhua Bookstores are there nationwide?
Data shows that by 2019, the number of physical bookstores in China had already exceeded 70,000, making it the country with the most bookstores in the world. Among them, Xinhua Bookstore had over 10,000 branches.
In other words, with more than 10,000 branches, Xinhua Bookstore achieved revenues exceeding 100 billion yuan, averaging 350 million yuan daily—essentially a "gold mine" status.
It’s strange—Xinhua Bookstores usually don’t seem crowded. How do they make so much money?
In fact, the primary way Xinhua Bookstore makes money is not by selling books but by distributing them.
Have you noticed? Walk into any Xinhua Bookstore, and wow—two-thirds of the space is filled with textbooks and study aids!
The best-selling books in Xinhua Bookstores nationwide are educational materials.
This is due to Xinhua Bookstore’s unique "background," granting it the rights to distribute and wholesale important publications. Almost all textbooks and study aids, from universities to elementary schools, are distributed by Xinhua Bookstore.
It’s worth noting that China’s compulsory education coverage rate is 100%, and the official net enrollment rate for junior high schools is 102.5%. Such a vast student textbook market alone ensures Xinhua Bookstore a substantial income source.
Moreover, it’s not just selling books that makes money—services also generate revenue.
On the Xinhua Bookstore online platform alone, textbook procurement services cover 26 provinces, municipalities, and autonomous regions, with annual revenues exceeding 135 million yuan.
Even the annual advertising revenue on the platform surpasses 15 million yuan.
Xinhua Bookstore’s publishing business revenue from 2017 to 2020 (Image from The Paper)
Additionally, Xinhua Bookstore owns all its branches, eliminating rental costs, and can lease out other spaces for additional income.
Beyond this, Xinhua Bookstore has a lesser-known identity—one of China’s largest commercial property owners.
That’s right, Xinhua Bookstore is also a "big landlord."
In early urban planning, a corresponding number of Xinhua Bookstores were always allocated based on the city’s scale.
Although these bookstores are part of public infrastructure, they typically own the property. Apart from the space needed for their operations and offices, there’s plenty of room for leasing or resale.
Therefore, Xinhua Bookstore isn’t concerned about losses in physical stores because, compared to most retailers, it saves the most significant expense: rent.
According to 2018 data, there were 52 large Xinhua Bookstore outlets nationwide with a business area exceeding 10,000 square meters and 983 outlets with areas between 1,000 and 10,000 square meters, all of which are owned and managed by Xinhua Bookstore itself...
Look at Beijing's Wangfujing or Shanghai's People's Square—aren't the largest Xinhua Bookstores built in those locations?
The Beijing Wangfujing Bookstore is located in the bustling downtown area, where land is worth its weight in gold.
Think about your hometown—isn't there also a massive Xinhua Bookstore in the busiest part of town?
Exactly, this is the real-life embodiment of "books hold a house of gold," and it's also the reason behind Xinhua Bookstore's seemingly "casual" approach to selling books.
However, even without worrying about profits, Xinhua Bookstore hasn't simply "lain flat." Instead, it continues to upgrade and adapt to market changes.
Beyond increasingly stylish and modern store designs, Xinhua Bookstore is also expanding its online and offline businesses. For example, Wenxuan Books, with its décor rivaling many trendy bookstores, is a new brand under Xinhua Winshare.
Wenxuan Books, targeting young readers
Most importantly, while Xinhua Bookstore's trendy outlets cater to young readers, its traditional stores still serve customers of all ages.
For ordinary readers, the biggest difference between Xinhua Bookstore and other bookstores is the guaranteed quality of its books, with no need to worry about counterfeits.
More importantly, whether in bustling metropolises or remote towns, the bright red sign of "Xinhua Bookstore" is everywhere, making book-buying convenient.
Distribution of Xinhua Bookstore outlets nationwide (Image from The Paper)
Like China Post, Xinhua Bookstore serves as vital national infrastructure, reaching every corner of the country—not a market-driven entity that can appear or disappear at will.
In many parts of the country, where entertainment options and learning environments may be limited, Xinhua Bookstore plays a crucial role in cultural dissemination and knowledge sharing.
After all, with its vast selection of books and extensive network of physical stores, Xinhua Bookstore is truly "the people's bookstore," where anyone can find what they need.
Thus, within the Xinhua Bookstore family, there are both trendy outlets like Shanghai's "Light Space"—a collaboration with architect Tadao Ando combining a bookstore and art gallery—and mobile book-selling points serving remote mountainous areas without bookstores.
Guangdong Xinhua Bookstore's "mobile book van"
No matter how times change, Xinhua Bookstore remains a paradise for adult self-learners and a haven for children seeking extracurricular knowledge.
Even if you buy nothing, no one will shoo you away for sitting inside and enjoying the air conditioning.
Book lovers can read here however they like—sitting, standing, squatting, leaning, or even copying while reading.
People don't have to worry about this place being like some trendy bookstores where, let alone reading, you'd feel awkward staying without buying a coffee.
After all, Xinhua Bookstore is not just a bookstore but also an important venue for the nation to promote cultural knowledge, a principle that has never changed.
Xinhua Bookstore, which has accompanied us throughout our growth and played a vital role in our pursuit of knowledge, carries the continuity of a generation's reading habits.
Even with ubiquitous Wi-Fi, constant attachment to phone screens, and information as fine as dust, people can still draw strength from books and experience the joy of reading.
Thanks to Xinhua Bookstore, many of us can still find our own spiritual sanctuary in this noisy world.