China's Xinhua Bookstore looks to profit from the sharing economy

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To propel itself forward in the Internet era, the state-owned Xinhua Bookstore has launched what it calls a "first-of-its-kind" online book sharing platform in one of its branches, offering a free book lending service after previously struggling to convince readers to pay up for its books.

Xinhua Bookstore, first established in 1939, has over 12,000 branches in China. However, the state-owned bookstore has in recent years found itself challenged by independent stores, such as Sisyphe Bookstore and Eslite Bookstore, names which have combined the traditional bookstore model with modern coffee shops and cultural spaces.

In the past five years, Xinhua has looked to modernize and learn from independent bookstores by supplying coffee shops, rest areas or organizing cultural activities. It has even started offering discounted books to attract more customers, which was previously unheard of in the state-run bookstore.

The latest move to bring Xinhua into the future is being trialed at a branch in Hefei, east China's Anhui Province. Customers can scan the barcode on books through a mobile app, after paying a 99 yuan (14.65 US dollars) deposit. Customers can at most take out two books at a time.

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Those who follow the borrowing terms and conditions can receive a small amount of money as a reward, while readers can connect through the app if they have similar reading preferences.

“It is a shame for people who spend money on best sellers to only put those books back on the shelf afterwards, which may discourage them from buying more books next time,” an anonymous officer from Xinhua Publication Groups told Anhui Business. “Offering a lending service may potentially promote book selling.”

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Claiming to be the world's first sharing bookstore, Xinhua's new policy has come into question online. Most Chinese netizens are asking what makes it different from a traditional public library, apart from the 99 yuan deposit.

“In Guangzhou, you can borrow free books from the library with your personal ID card. A deposit is not even needed,” said @Kwkmko.

“Beijing Chaoyang District Public Library has been offering free book lending since 2007, with a 50 yuan deposit. Three books a month is permitted. The book-sharing store is only a promotional strategy,” said @Tianranchuchen.

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But Xinhua also has support among some netizens. “Can you find the latest bestseller in a public library? I do not like the old books in libraries,” said @Xinanhuadudu.