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Xi Shu has a knack of following through on a hunch with action.

Many young men nurse great ambitions over a couple of beers, but few take pains to make their dreams come true. Not Mr Xi, the owner of the mainland's largest chain of bookstores.

The former maths teacher started a modest bookstore in 1993 in his home province of Jiangxi. He then spent two years studying the market and plotting his strategy before breaking into the national scene as the Beijing Jingqi Xishu Bookstore.

Mr Xi, 40, envisioned a chain of bookstores, along with an online bookstore and a book club. By the end of last year he had opened 556 stores and, adding 20 to 30 new branches a month, the total should exceed 800 this year.

The mainland book trade used to be monopolised by the government-owned Xinhua bookstores. Privately owned stores started appearing in the late 1980s but they were hobbled by numerous restrictions while struggling to stay afloat with limited resources.

'People had a hard time buying books they wanted. Xinhua stores had no vitality and other operators were weak, which gave us an opportunity,' Mr Xi said.

'We want to be a top-rank book retailer, an influential publisher, distributor, in short, a leader in China's book industry.'

Mr Xi estimates the mainland's book trade will grow 50 per cent from 40.8 billion yuan (HK$38.3 billion) in 2001 to more than 60 billion yuan by 2005.

Xishu bookstores initially targeted small and medium provincial cities where the cost of starting a business was relatively low. It was a smart choice.

As part of the agreement to join the World Trade Organisation, China pledged to open its book trade to foreign investors in stages - first main cities, then all cities. The arrangement had the unintended effect of sheltering Xishu Bookstores from competition on his home turf for a couple of years.

'We keep the threshold low to build critical mass quickly,' he said. The stores also serve as distribution points for his online bookstore and book club. Customers can place orders and pay their bills at a nearby Xishu Bookstore, which then delivers the books to them.

The investment for his operation was 20 million yuan, including eight million yuan of his own capital. Last year turnover topped 200 million yuan.

Privately owned bookstores have had a hard time getting favourable terms from publishers on pricing and credit because they were perceived as riskier than state-owned bookstores.

But Mr Xi said the discrimination would gradually disappear as private vendors became more established. Increased competition from foreign investors would also accelerate the change.

He hopes turnover will reach 300 million yuan this year, which would give him more muscle to strike bargains. He also aims to open bookstores in big cities by carefully planting them in neighbourhood communities to replicate the business pattern of other franchisees.

Mr Xi made his fortune in the 1980s by promoting calligraphy using hard-tipped pens. He designed a set of teaching and learning materials and set up correspondence schools in main cities. The venture brought him fame and valuable business experience.

Mr Xi hopes to move into publishing, a hugely profitable arena still closed to non-state entities.



Bookstore chain a success story for wily entrepreneur