MPH to offer book-vending machines, e-books

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Borders Group Inc’s recent filing for bankruptcy in the US has left many wondering if bookstore chains will survive or die a slow, but sure, death.Local chain MPH Bookstores Sdn Bhd is banking on survival by adapting and changing.

“Those that are able to change and adapt to the environment will (be able to) sustain and (remain) strong in the future,” said Donald Kee, chief operating officer of MPH Bookstores.

Bookstores have to evolve with the times if they want to keep afloat in the industry. The book industry is going through a huge transition and has been changing rapidly for the past 15 years, added Kee in an interview last week.

As part of that change, the retail trade is no longer the main focus in providing books to consumers for MPH. Book chains that have gone belly-up had the problem of overexposure with hundreds of megastores, said Kee. “We have decided to change our business model and be careful,” he said.

MPH has moved from brick and mortar stores to selling books online as well. Soon, the chain will be rolling out another book distribution channel called Project V which involves placing 10 book-vending machines in strategic locations around Kuala Lumpur.

The new channel will enable MPH to provide books to consumers without costly overheads like rental of premises and labour costs, which Kee noted are the two key costs for book chains.

Kee said the project will be launched in the next few months.

The vending machines, which will be located at places such as hospitals, universities, banks and LRT stations, will dispense books at discounted prices. The low overheads involved will allow MPH to sell books at a 20% discount compared with those sold in a retail store. Confident that Project V will be a success, Kee said it is not meant to take away business from retail stores but to provide extra convenience.

Asked what books the vending machines would stock, he said the decision would be based on “studying the market, using the retail bookstore as a platform”.MPH has been around for a long time, he said, adding, “We know what sells and what doesn’t.”

He also said the type of books stocked would depend on where the vending machines are placed. For example, if the location is a hospital, the machines would stock Malay, English and Chinese books.

The transactions would be cashless; payment options would include credit and debit cards, and ATM cards. An LCD screen would display a synopsis of the books available for purchase, and provide options for payment.

Looking to kill two birds with one stone, MPH’s vending machines would also double up as a branding exercise for MPH. “In this case, it’s not just purely business but also branding,” said Kee.

Furthermore, in moving with the times from print to digital, MPH is launching an e-book channel which will help it reduce overhead costs as well.

The e-book trend has taken a while to pick up in Malaysia as it has been difficult to purchase e-books from Amazon or Apple’s iTunes store without a credit card from the US or UK. MPH has been in negotiations since 2009 to launch e-book sales but ran into complications with copyright issues because of piracy concerns. Kee said now that negotiations with parties concerned had been finalised, MPH hopes to offer e-book products by the second half of this year.

This article appeared on the Media & Advertising page, The Edge Financial Daily, Mar 17, 2011