With one of the highest economic growth rates in the world, mainland China has emerged as a global economic powerhouse. Once primarily a manufacturer of inexpensively made goods for mature-market companies, domestic Chinese companies are now global brands in their own right. However, the last years have shown that the global economic uncertainty and weaker global consumption are slowing China’s growth trajectory. In search of a new economic model, China’s 12th Five-Year Plan (2011–2015) is looking to move the Chinese economy from export- and investment-driven growth to a more consumption-led growth.
Regulatory restrictions historically have limited market access for many M&E (media and entertainment) companies. However, the government is easing rules and encouraging investment. To stimulate growth in its cultural sector, China has taken steps to liberalize some rules in some sectors. But M&E companies still face a lot of regulations. Nevertheless, as almost every sector of China’s M&E market grows, China provides fertile growth opportunities for M&E companies — both foreign and domestic.
China is a complex market with many sub-groups and constantly shifting consumer tastes. Customer groups are fragmented across income groups, age groups, regions and behavioral characteristics. M&E companies must understand how this diversity impacts purchasing behavior so they can tailor their products and services, marketing, sales and distribution strategies accordingly.
It is important to mention that the Chinese people are enthusiastic consumers of all forms of media and entertainment, resulting in vigorous growth in nearly every sector. Between 2010 and 2015, China’s M&E market is estimated to have a compound annual growths rate of 17% Virtually every home has a television. In the ﬁlm sector, China has the second largest ﬁlm market in the world after the US and is on its way to surpassing the US by 2020.
However, the real M&E story is digital. From social media and online gaming to online video, the Chinese are the big digital consumers. China has become the largest internet market in the world — with less than half of its population online.
By the 2013, China has the world’s largest new media market, with the country’s growing Internet penetration and a vibrant range of new media applications. Data from the China Internet Networks Information Center showed that China’s online population had reached 564 million as of the end of last year, with the number of mobile Internet users hitting 420 million. China’s Internet penetration rate has exceeded 42 percent and the report expects the online population to reach 600 million in the near future. The growing number of applications will help new media become China’s most significant social and information platform.
China, already home to the world’s largest online population, is likely to replace the United States as the biggest e-commerce market by 2015, according to new research. So what would be the next steps of China to achieve the big plan of modernization and the era of new changes in this county?