Box stores wrap art and commerce together in one package. [File photo]

Box stores - mini-stores or stalls within shopping areas - are increasingly emerging in China and helping thousands of designers find a balance between pursuing their artistic instincts and cashing in on their creativity.

One such store, Fengguo, is located in Joy City, a busy shopping center in Beijing's Xidan area where the 100-square-meter space is filled with 200 box stalls selling designers' original wares. Customers crowd the delicate store to browse and buy unique items ranging from emblems with popular slogans to handmade stuffed dolls.

"The items here are different from those sold in other stores, and I can find something special, but the prices are a bit expensive," said Hou Jie, a 21-year-old tourist from Anhui Province, who paid 20 yuan ($3) for a cell phone accessory made from a hand-painted Popsicle stick.

Selling novelty

Wang Sanshi, founder of Fengguo and an oil painter, opened the first box store in Beijing's Zhongguancun pedestrian street in September 2007.

Wang said his idea came from opening creative bazaars. "After positive feedback from organizing several bazaars in Beijing, I realized it might be a good idea to open a permanent venue for designers, and we can share costs and profits to reduce potential risks," he said.

In Fengguo's stores, designers can rent stalls ranging from 0.21 square meters to 0.8 square meters for between 30-1,500 yuan ($4.40-$220) per month. For every item sold, Fengguo keeps 25-30 percent of its revenues and gives the rest to the designers.

"Renting stalls lowers financial barriers for young designers to sell their items, especially university graduates," Wang said.

If designers want to sell their crafts at Fengguo's stores, they must first submit online applications. Three judges assess all submissions according to originality and small-scale production quality. Only submissions unanimously approved by the trio are eligible to rent stalls.

Wang said judges typically approve one out of every 10 applications. "Fengguo aims at achieving originality and high quality, but we can accept different design styles," he said.

A designer team, Liang Yan and Wu Wei sell their original Cottonhead brand that includes products from pen bags to stuffed dolls, in Fengguo's stores. "Our cooperation began with creative bazaars three years ago, and the box stalls are a good platform for fresh designers to display their works and test their commercial value at an early stage," Wu said.

But not all designers have pure business ambitions. "Some designers' works are really creative but they might not have much commercial value, and we leave 15 percent of our space in every store for these designers," Wang said.

Easy entry

After three years' development Fengguo has 14 stores in shopping plazas and tourist attractions around Beijing, Nanjing, Guiyang and Nanchang, and the display formats have extended from boxes to trays, stands and clothes hangers.

"We want to provide designers the best platform to show their works," Wang said. "We have cooperated with nearly 1,000 designers and have more than 40,000 original items sold in our stores."

Following Fengguo's lead, other box stores are spreading across the country. IBox, a chain established in 2008, now has 13 outlets in Beijing, Shanghai and Tianjin. There are also a lot of independent box stores selling items from original handicrafts to second-hand and discontinued items.

"The entry barrier for the industry is relatively low, because the business model is stable and has little risk," said Sun Sansan, planning director of IBox. "But it is challenging opening more stores, which adds to the labor costs and the need for greater designer resources."

Wang also said running box stores is not always a very profitable business. "Many imitators have swarmed into the market since 2008, but some closed down or collapsed last year due to poor management and a lack of core competitiveness," he said.

Sun said keeping talented designers is important for running box stores. "Most of our sales revenues come from 20 percent of our experienced designers, who own brands and can release new designs quickly," she said.

With more box stores emerging, Fengguo set a clause for its designers, which forbids them to sell items at other stores located in the same shopping plaza or business circle. "We want to ensure that customers can find unique experiences in our stores," Wang said.

Sun said Fengguo's clause puts pressure to designers' and IBox's business. "We both have stores in popular business areas such as Wangfujing and Zhongguancun. The clause limits some popular designers from expanding their sales channels," she said.

New models

With increasing competition, both store owners and designers are trying new ways to expand their business and enhance their brands.

Sun said running box stores would be only part of their future business. "Box stores mainly serve as sales channels, and we also customize creative products for enterprises, and try to hire designers to create original items using IBox's brand." Cottonhead designer Wu said selling items at box stores has some limitations. "As our business broadens, we feel their stall space is limited. We can only put most popular items there and our profits are shared by these stores," she said.

The couple opened an independent store in Beijing's Gulou area in 2008, as well as an online retail store at taobao.com. Wu said currently their sales revenue can reach 200,000 yuan ($29,300) per month, and they plan to broaden their sales channels and also create a high-end brand to be sold in Beijing's 798 Art Zone.

"Fengguo's business doesn't rely just on certain designers, and I'm glad to see designers grow with our help," Wang said.

Wang even has a goal of cultivating 5,000 designers, who can earn 5,000 yuan ($730) per month from Fengguo's stores, within the next two or three years. "There are 300,000 university graduates majoring in art design every year, so there's a lot to do for them," he said. "I want to integrate a creative industry chain to help designers convert their novel ideas to business and brands."

Besides opening stores, Fengguo has cooperated with Youth Business China to provide talented designers with financial support and business advice. Liang and Wu got 50,000 yuan ($7,325) interest-free loans in 2008, and used the fund to register their brand and open the store.

Wang said they also cooperate with universities such as Beijing Institute of Fashion Technology and China Central Academy of Fine Arts to provide students with practice opportunities. "Students can display their works at our stores, and universities can assess their achievement in accordance with market performance," he said.