The Chinese magazine media industry continues to expand although the years of double-digit economic growth appear to be gone, according to Didier Guérin, president & CEO, Media Convergence Asia-Pacific in his report for FIPP World Magazine Trends 2014-15.
“China’s economy is changing and so is the local media industry” Guérin writes in Trends. “The media industry is experiencing further fragmentation and Chinese consumers are becoming more sophisticated.”
Advertising expenditures were projected to grow by 9.8% in 2014 and 11% in 2015, according to GroupM1.
Separately, ZenithOptimedia predicts a similar expansion of the industry by 11.2% in 2014 and 11.3% in 2015. However, both media research companies agree that the magazine media industry will no longer experience growth in their share of advertising spending.
Up-scale womens’ titles (mostly fashion) – with strong international brands – still benefit from the quality of their editorial environment to attract luxury products, but general interest and business magazines are challenged.
Factors causing this erosion of advertising revenues include the the fact that China now has the largest internet population in the world with 632 million internet users (at the end of June 2014) and 83% of them going online via mobile). China also has the largest smartphone market in the world which, according to data firm IDC, is expected to reach nearly one-third of the 1.8 billion smartphones to be shipped in 2018.
Plus the impact of the government crackdown on corruption, initiated by the new administration when it came to power at the end of 2012, which resulted in a serious reduction of purchase of luxury products. According to Bain & Co, luxury sales grew by only 4% in 2013 compared to 19% the year before.
These factors obviously impact the magazine media industry says Didier Guérin. Several companies have diversified their offering by creating a related website or a digitised edition. A few companies have invested some substantial resources and are starting to see the results. For example, Hearst Magazines now has a total of 23 million unique visitors across all its magazines in China, with its leading brand ELLE.com.cn, which has experienced a 30% growth in traffic in 2014 compared to the previous year.