Today, I went to Eslite Bookstore in Uni-President Int’l Building in Taipei. I spent roughly an hour there and decided to buy a few books. Then, I turned to books.com.tw (not associated to Eslite) where I’m pretty sure I can get better price to order books and expect to pick up the parcel at 7-ELEVEN close to my place. I don’t know how many people do this but it’s quite natural for consumer to enjoy book discovery provided in physical store but to place order at place where it has price advantage.
The business model of this physical marketplace operation is rent arbitrage. Using the bookstore as the anchor to attract traffic, operator leases the marketplace from landlord and collects fix rent and turnover rent from other retail and F&B tenants. Opportunity cost of in-house anchor (Eslite bookstore) can be considered as costumer acquisition cost for overall marketplace. As I can feel clear business leakage in anchor’s operation, I’m not sure whether the operator figures out how to monetize lead generated to the online bookstore or tries to capture the economics of order flow. (books.com.tw opened in 1995 and the marketplace started the operation in 2006)
The most ironic is that Uni-President Group is not only the landlord but also has economic interests in the online bookstore and 7-Eleven.