Spotlight on China - media and entertainment
China has emerged as an economic powerhouse. In efforts to continue its growth, China is looking to its “cultural sector,” which includes M&E, to become a stronger engine of its economy.
The government is easing restrictions and encouraging investment. This, combined with the rapid rise in digital, offers significant growth opportunities in China for M&E companies.
“Every global strategy needs to include China.” — David McGregor, Asia-Pacific M&E Leader
Although the challenges for M&E companies seeking to penetrate or expand their market presence in China remain significant, the market’s potential is too vast to ignore.
Building a roadmap for success
We have identified four key factors that can help M&E companies build a roadmap for success in China.
Build strong brands
- Align brand strategy with core market segments
- Emphasize the brand’s story and quality
- Localize brands
- Use the power of social to build relationships
- Adapt to changing market dynamics
Succeed in digital
- Select partners that support digital distribution objectives
- Foster a culture of innovation
- Anticipate and adapt to changing mobile consumption habits
- Use data to develop insight into consumer behavior
- Experiment with evolving monetization models
Form and operate successful partnerships in China
- Align the scope of joint ventures (JVs) and the company’s strategic objectives in China
- Embed the JV’s long-term goals and governance model in the partnership agreement
- Develop JV corporate infrastructure to support both traditional and digital media
- Establish a trust-based approach to management and be sensitive to cultural nuances
- Consider the impact of a JV exit, buyout or IPO on your short- and long-term goals
Navigate the regulatory landscape
- Make regulatory considerations a core pillar of growth strategy and operations
- Identify and develop relationships with key regulatory stakeholders
- Engage reputable local advisors to help guide regulatory interpretation
- Continuously assess evolving regulations to identify opportunities and risks
- Factor visible and hidden compliance costs in your business and operating plans
Considerations for doing business in China
The Chinese government, as part of its 12th Five-Year Plan, is relaxing regulations for investment in some M&E sectors. Change has been protracted, but it is gaining momentum.
Given its geographic size and economic importance in driving future global demand, investing in China is not a short-term endeavor. Any consideration of China has to be embedded into a global business strategy with a multi-year horizon.
M&E companies need to understand and anticipate both the complexity and the enormous possibilities. Companies with the agility, adaptability and patience to make a long-term commitment to the market will be best positioned to succeed.
“China presents huge opportunities for global M&E companies, but to reap the benefits requires careful planning and execution.” — John Nendick, Global M&E Leader
