When online bookstores came on the scene back in 1999, there were around 5,000 brick-and-mortar bookstores in Korea. Today, there are barely 1,500 nationwide. Many of the closures, affecting mostly neighborhood stores, were due to their inability to compete with online retailers’ offer of a much wider title selection, hefty discounts, shopping convenience and fast delivery. Interestingly, many of the big players, such as Kyobo, Aladdin, Youngpoong, and Bandi & Luni’s, now operate both online and offline stores.
Korea’s biggest online bookstore, YES24, controls 42% of the market. Established in 1998, its annual sales of books and nonbook products (stationery, music, movies and games) exceed 10 million items. On the average, its nine million registered users purchase around 100,000 books each day. According to head of book division Byounghee Kim, analytics shows that 52% of YES24’s online readers are female, 80% are 30-year-olds and above, and around 5% of books sold are in English. “Novelist Jungrae Jo’s works, such as Taebaek Mountain Range, Arirang and Han River, are very popular. Also selling well are romance, detective and sci-fi titles.”
Books at YES24 are on the average 20% cheaper than at physical bookstores. “We give 10% rebate on top of the usual 10% discount on all titles. For orders above $50, we offer a small token of appreciation, such as a small mug, coupon or gift voucher. Because of fixed pricing regulations, we cannot offer more than 20% discount in total, but we can provide gifts as marketing freebies,” says Kim, pointing out that super-fast, low-cost delivery is the key differentiator of YES24. “Our warehouse management system allows us to deliver items to customers on the day the order is placed.” Located in Paju, its book warehouse is the largest of its kind in Korea with nearly three million titles. Korea’s efficient transportation system aside, the country’s fast-speed broadband network also enables YES24 to incorporate features such as video clips to introduce new titles and author interviews on its website. It also signed up for SK Planet’s mobile-enabled payment service Paypin to provide more convenience to its users.
Promoting reading, adds Kim, is one of the company’s ongoing efforts. More than 400 events are held annually, including author talks, book signings, reading events and book contests. “About 10 years ago, we started an event where children read and reviewed titles recommended by a group of educators, librarians and our book specialists, and it remains very popular today.” The company also conducts “Camping with Writers” to bring readers and authors together to discuss everything about books, writers and literature. “Then there is the Book of the Year selection—24 top titles picked by our specialists based on our sales and readers’ votes. The objective of all these events is the same: to cultivate new readers.” And noticing that sales of nonbook items are growing faster than books since 2012, YES24 is increasing efforts to get more people to read.
Given its dominance in the Korean online book market, it is not surprising to see YES24 venturing outside (to Vietnam, Indonesia and Thailand so far) or launching its own e-reading device, Crema Touch, in September 2012. Crema Touch and Crema Shine—a newer model with backlight that was marketed last August—sell at $120 and $150 respectively. To-date, more than 50,000 units of the e-readers have been sold.
Over at Kyobo Book Centre, Korea’s largest bookstore chain, recent developments in the digital publishing industry have prompted it to start a subscription-based e-book service, Sam, in February 2013. “We offer several types of subscription, including a family-based model where four individuals can share 12 e-books for six months before the offer automatically lapses. With this model, each e-title sells for around $3.00, and they have an option to purchase it outright. Subscribers can also purchase the Kyobo Sam e-reader for around $90, compared to the usual retail price of $140,” says digital business team manager Byunhyun Ahn, adding that Kyobo has a five-year plan for the subscription model, with the first year focused on advertising and promotion.
“Publishers and authors naturally are skeptical about this model as the profit is less than that from the sale of a print book. But we have assured publishers that 60% of the subscription fee for each title will go back to them every month, and we are confident that consumers will like this model. Our goal is not to start a retail price war but to attract people who have not been reading any books, print or digital. It is a way to promote reading in the age of social media, to get more people to read in order to sustain the book industry,” adds Ahn. On the average, a print book sells for $14, whereas an e-book is priced between $7.50 and $8.50.
Established in 1981, Kyobo hires about 70 people in its digital division for content sourcing, development and sales. “While we are now focused on selling e-content, the long-term vision is on both production and selling. We are planning to expand from content production to more and varied value-added services. Given the decrease in books and new content coming into the market, there is a need to help new authors get their work published,” adds Ahn, and Kyobo “will provide the necessary ecosystem and infrastructure to help them connect with readers and distribute their work.”
For its physical stores at Gwanghwamun and another 13 locations, Kyobo is repositioning them to be more than just shelves and tables of books. “We want Kyobo to become more of a cultural space and the meeting point of choice for culturally active people, as well as a place where print and e-content come together, where people’s lives are enriched,” says Ahn. The stores regularly invite authors, readers and publishers to its ‘book concerts,’ and “over the years we have had singers, comedians, professors, politicians and the liberal arts community talking about books. These gatherings have produced new concepts and book ideas that we channel back to the publishers. We also organize author-led culture tours. It is all about extending our value chain and expanding our role in society.”