Letter from... Malaysia

In the Klang Valley, which includes capital city Kuala Lumpur and urban areas of the rich industrialised state Selangor, a battle of the mega-bookstores is shaping up between two incumbents and a new challenger.

Local chain MPH Bookstores runs a 36,000 sq ft superstore at Kuala Lumpur's MidValley Megamall, which touts a 5km shopping experience, and another megastore at the 1 Utama mall in affluent Petaling Jaya, a Klang Valley suburb bordering Kuala Lumpur. Japanese chain Kinokuniya's 21,000 sq ft flagship store featuring about 300,000 book titles and 2,000 magazine titles is an anchor tenant at the Suria KLCC mall, part of the colossal Petronas Twin Towers complex in Kuala Lumpur.

US chain Borders Group Inc has joined the melee. Its first ever franchisee, Berjaya Books Sdn Bhd, has opened Borders' largest global superstore with over 200,000 English and Chinese books in a 60,000 sq ft space at another gargantuan Kuala Lumpur mall, Berjaya Times Square. The second Borders outlet, covering more than 23,000 sq ft, will open at the Curve, yet another upmarket mall close to 1 Utama, and is slated to start operating in the fourth quarter of 2005.

However, Borders Group Inc media representative, Anne Roman, rejects earlier press reports that the chain would open up to 10 Malaysian stores, calling such reports premature: 'We will open the first franchise store in April 2005 and have announced the location of a second, but, beyond that, we have not made a specific commitment to a certain number of stores in Malaysia.'

Be it two or 10, isn't the arena getting far too crowded for a country where most people eschew reading, especially in English? Former National Library Director-General Datuk Zawiyah Baba told newspapers in 2004 that, for a developing country, Malaysia's literacy rate was quite high at 93%, but that only 87% of literate Malaysians actually practised reading, and fewer still read books. The last study of the Malaysian reading profile commissioned by the National Library indicated that Malaysians read only two books a year in 1996, up from the abysmal two pages a year they read in 1984. The caveat: the 1996 study covered a small sample of about 22,000, compared to a national population of about 20m at that time. However, many in the book trade, like Raman Krishnan of independent English bookstore Silverfish Books, agree that Malaysians do lack a reading culture.

When they do read, the majority of book-buyers pick up thrillers from the likes of John Grisham, Dan Brown, and Stephen King, and the advice of gurus like Warren Buffett, Dale Carnegie, Malaysian feng shui master Lillian Too, and local millionaire landlord-cum-pilot-cum-financial-adviser, Azizi Ali. These are frequently on the evergreen and bestseller lists, notes Renee Koh from MPH Bookstores.

Once supply exceeds demand, 'you don't have to be a Nobel Prize economist to figure out that something is not right,' quips Krishnan. He notes that when Silverfish opened in 1999 prior to the influx of the megastores, there was about 25,000 sq ft of book retail space in the Klang Valley. With the entry of Borders, he estimates space will multiply to 250,000 sq ft or an increase of 1000%. 'Is it even conceivable that readership in Malaysia has increased by 1000% in five years?' he asks rhetorically. Krishnan adds: 'Book distributors will tell you that their growth per annum is about 5%-6%, which will give a (total) growth from 1999 of about 25%-30%.' Kinokuniya's growth is higher; 2004 news reports noted its English book sales had risen 10% a year since its flagship outlet opened in 2001. Approximately 70% of the flagship store's space is dedicated to English titles.

When projections don't match reality somebody has to bleed. Krishnan says that rumour has it that one megastore is already finding the going tough. And Elke Wollschon, managing director of Pay Less Books - a second-hand chain with over half a million English titles - admits that sales have dropped lately from previous years' peaks, and notes that some other retailers are singing the same sad song.

Nazatul Izma Abdullah is a freelance writer on business and finance issues, based in Malaysia.