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China

James Borton eyes the media
Magazine licensing red-hot in China

Signs that the world's most populous nation has abandoned socialism in almost all but name and hurled itself into exuberant capitalism are colorfully demonstrated by the globalization of the magazine industry and in the slick pages of slick new Chinese journals. This has given rise to Chinese fashion magazines, enticing a new generation of female readers with high-end name-brand advertisements and tips on the latest fashions, the "in" lipstick colors, hairstyles and lifestyles, and peeks at the rich and famous. Some even write about art and culture and tell China's new middle class where to find the most-talked-about plays, films and books.

International media deals in the Middle Kingdom are getting hotter than a hot cup of green tea, according to many global magazine publishers and industry consultants, since all publishers want a slice of China's expanding consumer market. China's accession to the World Trade Organization (WTO) means it must admit foreign competitors into banking, auto production, publishing - you name it - and level the playing field.

And as long as they're "just" apolitical, money-making glossy magazines about consumerism, business and being fashionable, censorship issues do not arise. Modern China wants its women. especially its independent professionals with disposable incomes, to put their best, most modishly shod foot forward - no more shapeless and identical drab "Mao" suits, hacked haircuts and black slippers. Those were discarded long ago, and now China looks to the real glitz and glamour.

Under the bright neon lights of major newsstands and kiosks in the major coastal cities - the trend setters and followers, especially in Shanghai - are hundreds or possibly thousands of international titles including Esquire, Cosmopolitan, Seventeen, Harvard Business Review, Forbes, PC, magazines of all shades and stripes, and appealing to virtually all interests. And of course there are domestic glossy fashion and lifestyle magazines, such as iLook and Rayli, all vying for space in cluttered kiosks along busy thoroughfares.

"Brand names are social status and quality of life. For example, when I was in the United States, I didn't pay much attention to brand names. Here it's a culture. Look at me now, I'm equipped with nothing but brand names, say, Gucci, Fendi, Armani, Versace and the like," Lin Jie, 34, a producer/manager for China Central Television (CCTV), told Asia Times Online when asked about the importance of fashion magazines to her.

Magazines the door to the rising middle class
With the liberalization of the Chinese publishing industry, the magazine industry's consumer and trade publishers found an open road to China's rising middle class, a springboard for many Western publishers in their joint ventures with Chinese partners. China's recent media reforms, in line with its WTO obligations to level the playing field and admit foreign competitors, have made this magazine bonanza possible.

Until very recently, foreign publishers working in partnership with a Chinese agent had to use various municipal distributors and local post offices for distribution of their magazines. The reforms are now helping magazine publishers lift the restrictions on distribution. This has been achieved largely because of China's accession to the WTO and it now enables foreign companies to establish their own nationwide magazine distribution networks.

"Consumption as part of the economy is very much promoted. These new magazines have come to be recognized as part of the media industry rather than the state ideological apparatus. They also represent the effort of foreign media corporations in extending their influence in the Chinese market," Professor Joseph Chan of the Chinese University of Hong Kong School of Journalism and Communication told Asia Times Online.

The Chinese Academy of Social Sciences (CASS) has released reports that suggest China's middle class accounted for roughly 20% of the country's 1.3 billion population in 2003, estimated at between 200 million and 300 million. Based on an annual growth of 1 percentage point, the "middle class" (according to the academy's standard, this constitutes families with assets valued at US$18,137-$36,275) is expected to make up almost 40% of the total population in 2020, according to the academy report (not yet available in English online).

"China's size and influence are such that current and aspiring players cannot afford to be absent from the market," said publisher Tom Gorman, who successfully launched the Chinese edition of Fortune magazine in 1996 and now works as a media analyst at CCI Asia Pacific Ltd. Author of Guidelines for Publishing in China, Gorman explained that advertising spending in the magazine category grew by an average of 33% annually from 1984 to 2003 and is likely to maintain very high rates of growth for the foreseeable future.

30,000 magazines introduced in 2002 alone
According to the International Federation of the Periodical Press (FIPP) headquartered in London, China's reported magazine financial picture over the past year is the only compass needed for foreign publishers to make a beeline to Beijing and also to inspire more domestic start-ups. In 2002, the total value of imported publications in China amounted to well over $68.5 million, with 30,000 publications introduced into the marketplace. In 2003, the total advertising revenue of all Chinese B2B (business to business) titles was more than $302 million. With the highest gross domestic product growth in all of Asia, China's GDP was well over 9% in the first half of 2004, and with nearly 300 million middle-class consumers spending wildly on cars, computers, mobile phones and property, it's no wonder that the Chinese version of Cosmopolitan magazine sells more than 550,000 copies each month.

Cosmopolitan, published by Hearst Magazines, was introduced to the Chinese in 1998 by George Green, president and chief executive officer of Hearst Magazines International. The magazine is licensed through a Beijing-based partner, Trends Magazine, which publishes other Hearst titles, including Cosmogirl, Harper's Bazaar, Esquire, Good Housekeeping and Popular Mechanics in China, and in Chinese.

"We have not seen any interference on the part of the government as regards to the content of our titles. The only time we had a problem was five years ago when the government made us remove the branded title, Cosmopolitan, for four months from the cover of all our magazines for reasons never explained," said the indefatigable Green in an e-mail interview with Asia Times Online before jetting off to Milan. This case appeared to be an issue of intellectual property rights, not censorship.

Editors of Trends magazine, located in Beijing, declined to be interviewed for this article and referred all questions to Trends Communications' US partner, Hearst Magazines International. In China, Hearst International and International Data Group individually own a 20% equity in Trends Communications. The remaining ownership is controlled by the Ministry of Tourism of the People's Republic of China.

The success of Hearst's consumer titles in China did not go unnoticed by Hung Huang, a bright modern Chinese woman with impeccable political lineage, a US education (New York state's Vassar College), and the jobs of publisher and CEO of an upscale magazine.

Chinese identify more with Gucci than Mao
"Being an entrepreneur is very difficult in China and coming from a prestigious family has its advantages and disadvantages. The advantage is that you get through doors easier, the disadvantage is that most people would enjoy watching you fail more than you succeed," said Hung Huang, publisher and CEO of iLook , launched in 1998, as a slick luxury-goods magazine with a readership now approaching 60,000. She discussed the magazine industry in an extensive interview with Asia Times Online.

Hung's mother was a personal English tutor to Chairman Mao Zedong, and her stepfather, Qiao Guanhua, served as China's foreign minister of China in the 1970s. Qiao was responsible along with US national security advisor Henry Kissinger for the Shanghai Communique, stating the basics of the new China-US relationship, at the historic meeting between president Richard Nixon and premier Chou Enlai.

"My mom was dead set against this [fashion-magazine business] in the beginning. She thought a fashion magazine was flimsy, not serious, and light-headed. She thought I had totally forgotten I have a brain and am not that pretty. Years later, I found out that my grandfather actually started the first magazine ever in China - it was a political journal under the rule of the Qing Dynasty," Hung, 43, said in an e-mail response to questions from Asia Times Online.

Hung's company, China Interactive Media Group (CIMG), is in Beijing, about five kilometers from Tiananmen Square, in what is referred to as the 798 Factory Complex, designed in the 1950s Bauhaus style. This is where many young Chinese involved in the arts and publishing have converted abandoned factories into studio galleries and lofts. Not all of the media projects have proved successful. The failure of the Chinese version of Wired was attributed to both a nosedive in the "new economy" in the United States and overzealous Chinese government censors.

Hung's trendy magazine iLook is bringing in advertisements from Louis Vuitton, Christian Dior and others at a cost of $6,800 a page, and the glossy averages more than 30 pages of ads an issue. The newsstand price is the equivalent of $2.50 per copy.

According to Hung, iLook focuses on celebrities, and the journal carries a regular column on what celebrities are wearing to public events. This column is one of the most popular items in the magazine.

Building a brand following
Another favorite among readers is a column called Branded. It goes into the story of a brand and gets into details of its products. Another one is something like "Not Yet in China", which talks about brands that are hot internationally but not yet sold in China. She builds a constituency before the brand arrives.

And iLook is not about first dates or grabbing a husband, but how to tell the real Louis Vuitton from the knockoff. Owning the genuine article is increasingly important to status-conscious independent professional women with disposable incomes.

Hung's CMIG is also the licensee for Time Out Beijing and Time Out Shanghai. Time Out, headquartered in London, has been successful by transacting licensing deals with foreign publishers, which gives the foreign partner 100% of the responsibility for producing the magazine.

"Chinese publishers, both consumer and B2B, are actively looking to partner with Western media. Almost everywhere you look in China, from building and construction titles to art and antiques and fashion, there are opportunities for licensing," claimed Allen Furst, the president of Asian Projects Inc, a media consulting firm based in Cambridge, Massachusetts.

Hung's glossy magazine iLook created a big splash initially in the entertainment industry. "We are very influential among the entertainment elite. Our editor-in-chief, Xiao Xue, is dubbed as the godmother of fashion for the stars," Hung told Asia Times Online. The magazine's editor receives thousands of letters from women seeking advice about what to wear for public events. As luxury brands have permeated the new China, iLook and other lifestyle magazines offer quality fashion information for the newly independent professional woman.

$10 an issue for Chinese fashion magazine
"I don't object to paying $10 an issue for Rayli, another Chinese fashion magazine, arguably the most popular fashion magazine in China," said Harvard University science graduate student Yuan Chen, 24, who plans to head to a career on Wall Street after graduation.

CMIG's license agreement with Time Out, a global magazine franchise for city publishers that provides a glossy and timely guide on the local arts and entertainment scene, is important to the entrepreneur Hung.

"Among our titles, this one is the closest to my heart. The most innovative, creative theater and art could not reach the Chinese public - we didn't know where to go to find these things. So to publish a Chinese listings magazine is not only a business, but I felt it was something I could do to contribute to the growth of Chinese urban culture. I so want my readers to see what great culture is happening around them," Hung said.

It's a short stroll for Hung (who revealed that it takes exactly 287 steps) each day from her doorstep in the stylishly remodeled Bauhaus-style complex to reach her office where she offers fashion and arts information to a new stratum of affluent and independent women. This does seem to offer a sharp contrast to Chairman Mao's Long March to Chinese communism: the short walk to capitalism and maybe even feminism.

James Borton is an author and freelance writer currently at work on a book on China's media. He welcomes media news releases, tips about trends, story ideas and comments. He can be reached at
asiareview@yahoo.com.

(Copyright 2004 Asia Times Online Ltd. All rights reserved. Please contact us for information on
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Dec 16, 2004
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