Bullish on China

Here, thanks to a report on the Magazine Publishers of America (MPA) website, is some useful intelligence for any Canadian publishers who might want to launch into the China market.

Jeff Sprafkin, CEO Media Pacific Limited, who has twenty years media experience in China, told a recent MPA Breakfast Forum

• he expects between 30% and 50% growth in ad spend for major magazine categories.
  
• there will be a continued loosening of regulations in and around the magazine segment.
  
• local Chinese publishers are getting very good. They are able to bring high quality titles quickly to market.
  
• Competition with foreign brands will only increase.
• Beijing and Shanghai remain the major magazine markets for publishers.
  
• Weak distribution not demand, hinder growth in inland cities such as Chongqing, Sichuan, and other Central China hubs.
  
• Independent newsstands represent the main distribution channel, though convenience stores are fast gaining share.
  

China’s total media ad spend continues to soar and will approach $30 billion by 2006. Magazines, still a small player, are expected to top $1 billion by 2005 [Ed. note: compare this with Canada's C$850 million.]

There are approximately 106 foreign titles distributed in China. Established licensed titles dominate in the IT and fashion categories. Local leaders are fueling keener competition in newer growth categories such as business, auto and travel.

Sprafkin reminded attendees that magazines and serial publications remain highly restricted. Foreign entry is limited to licensing partnerships and advertising representative relationships. Hong Kong registration is reportedly being coordinated more closely with authorities in Beijing, suggesting that China is moving to reduce HK-based magazine publishing by mainland entities.

The advertising-rich magazine categories are becoming saturated, especially in the large eastern cities. The newsstands are becoming increasingly crowded [Does this sound familiar?]. With fierce competition from local publishers, segments of the magazine market offer less room for newer foreign entrants. The market is showing signs of maturity.

In this respect China is not unlike other markets and countries. When the general categories become filled, opportunities arise for the more targeted titles. Sprafkin suggests that publishers look beyond magazine formats to book series, events, and online. The interior cities are emerging with unmet needs.

Click on the headline to go to the MPA site.