Hong Kong's Causeway Bay neighbourhood is a warren of upscale shopping centres and standalone retail giants paying some of the world's steepest rents. Another shining 12-level mall called Hysan Place has just opened there, so new that when I went in there last Saturday one of its major ground floor tenants hadn't yet opened for business.

But the place was still buzzing.

One big reason for the excitement was a Taiwanese bookstore concept called eslite, which stretches from the eighth to the 10th floors, each level connected to the next by an internal escalator. The store is eslite's first bow outside of Taiwan, but its fame has preceded it and the crowds are dense. After shopping there for an hour I could understand why.

Eslite is an amazing example of how just when you think a whole retail sector – in this case, books – has been flattened like a tack and carried out unconscious by the grim reapers of e-commerce – it comes back at you with something that's so effective, so compelling and so exceptional that it seems to guarantee the future of the store – even, amazingly, the future of the bookstore.

Eslite isn't another Dymocks or Borders. In fact it cagily avoids badging itself as a bookstore at all, referring to itself instead as a “cultural hub”. The self-reference is appropriate. eslite does have a massive book offering but it also sports a tearoom, coffee bar, wine shop, an extensive selection of designer stationery, wellness products, jewellery, leather goods, music and gifts.

The staff are genuine brand ambassadors, helpful and knowledgeable without being suffocating, out to make sure you have a positive shopping experience. There is plenty of time for it because the store is open around the clock for three days every week.

Eslite is not the only poster child for what the physical store can do that online stores can't, if it really tries.

Yet beaten around the ears by e-commerce and scuffed up by recession, the retail store as a shopping channel was beginning to look like a rumpled dinosaur to many observers.

Now it's mounting a counter-attack and at places like Hysan the assault is starting to look mighty effective. Eslite aside, the mall's fashion stores offer up a visual merchandising clinic, exemplified by the aptly named “Garden of Eden”, which envelopes the visitor in a swirl of delicate colour and exquisite fixtures on the sixth level.

The Hysan mall and others like it are an expression of confidence in the store. The better store retailers increasingly believe they have an ace up their sleeves in the competitive foot race against online behemoths like Amazon - the store itself. The store enables them to offer a 360-degree brand experience in a real-world setting that they believe e-commerce can't match.

Moreover, they can add technology and services to the store that better leverage the space. It can be a place to communicate directly with a customer via mobile technology, to fulfill the brand's online orders and sell additional products and services to customers who ordered online and are picking up in the store.

The question facing the Australian retail industry is not "Can the store compete?" To say it can't is a cop-out. The real question is "Do we have the will, talent and vision to do what it takes?"

Ominously, many in Big Retail are still obsessing about consumer sentiment and the vagaries of the business cycle, when the problem is right there in the mirror.

Michael Baker is principal of Baker Consulting and can be reached at michael@mbaker-retail.com and www.mbaker-retail.com