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Cultural and Creative Products Retailing - China - May 2019

OVERVIEW
What you need to know
Covered in this Report
EXECUTIVE SUMMARY
The market
The culture and related industries are worth RMB 8,925 billion, growing at 8.2% in 2018
Figure 1: Market size of culture and related industries, China 2015-18
Figure 2: The revenue of culture and related industries by types in 2018
Key drivers
Chinese government committed to supporting cultural and creative industries
The booming of cultural facilities and the content industry
Figure 3: number of cultural facilities
Figure 4: visitors of cultural facilities
IP fever and the commercialisation of IP
Three noteworthy players
Revival of traditional culture - The Palace Museum故宫博物院
The balance of content and commerce – Yitiao一条
Fulfilling the needs of the ‘third space’ – Yanjiyou言几又
The consumer
Café, libraries, and bookstores are the centre of cultural and creative leisure lifestyle
Figure 5: Changes in visiting cultural venues in the last six months, February 2019
Cultural and creative industry has great potential in lower tier cities
Figure 6: Changes in visiting cultural venues in the last six months, % of visiting more, by city tier, February 2019
Cultural and art lovers are more about individual characteristics and personal interest instead of income and city
Figure 7: Contact with cultural and creative industries – CHAID – Tree output, Feb 2019
No clear winner and half of respondents do not even have any favourite IP
Figure 8: Top 15 favourite IPs, February 2019
Films and novels have more say in popular IPs
Figure 9: Sources of knowing favourite IP for the first time, February 2019
Strong bonding between favourite IPs and IP merchandising
Figure 10: Purchase of products that have been marketed with favourite IP, February 2019
Married consumers with children have interest in buying IP merchandise
Figure 11: Purchase of ip products, by family structure
IP merchandise has to build the emotional connection to appeal young adults
Figure 12: Purchase of ip products, by age groups
What we think
ISSUES AND INSIGHTS
Sell dreams, not products
The facts
The implications
Tangible culture and fun
The facts
The implications
Emotional connection with entertainment IP merchandise
The facts
The implications
MARKET OVERVIEW 
The culture and related industries are RMB 8925 billion business, growing at 8.2% in 2018
Figure 13: The increase of total revenue of culture and related industries
Figure 14: The revenue of culture and related industries by types in 2018
Key drivers
Chinese government is committed to supporting cultural and creative industries
The booming of cultural facilities and the content industry
Figure 15: number of cultural facilities, 2013 and 2017
Figure 16: visitors of cultural facilities, 2013 and 2017
Figure 17: number of films, tv series, books 2013-17
IP fever and the commercialisation of IP
Figure 18: Number of exhibitors at china licensing expo 2014-18
Figure 19: the collaboration of heytea and pechoin
THREE NOTEWORTHY PLAYERS
Revival of traditional culture - The Palace Museum故宫博物院
Fun and creativity
Figure 20: fun posts of the Palace Museum
History and entertainment
Figure 21: Masters in The Forbidden City and Shang Xin Le Gu Gong
New Retail in merchandising
The balance of content and commerce – Yitiao一条
Treat e-commerce content like media content
Figure 22: Yitiao  online store
New retail lifestyle store
Figure 23: Yitiao lifestyle store
Fulfilling the needs of the ‘third space’ – Yanjiyou言几又
Bookstore as recreational and social space
Art and Cultural Centre
Figure 24: Yanjiyou flagship store Xian
THE CONSUMER – WHAT YOU NEED TO KNOW
Café, libraries, and bookstores are the centre of cultural and creative leisure lifestyle
Going to the cinema is the most popular cultural activity
Beautiful interior design is a must for young consumers
No clear winner in popular IP (intellectual property)
Films and novels are popular sources of IPs
Challenge and potential of entertainment IP merchandising
TRENDS IN ENGAGING IN CULTURAL AND CREATIVE ACTIVITIES
Emerging leisure and physical activity culture encourages Chinese consumers to go outside
Café, libraries, and bookstores are the centre of cultural and creative leisure lifestyles
Figure 25: Changes in visiting cultural venues in the last six months, February 2019
Great potential in lower tier cities
Figure 26: Changes in visiting cultural venues in the last six months, % of visiting more, by city tier, February 2019
Family is the next big thing
Marketing to single people
Figure 27: Changes in visiting cultural venues in the last six months, % of visiting more, by family type, February 2019
SPENDING IN CULTURAL AND CREATIVE PRODUCTS/SERVICES
Going to the cinema is the most popular cultural activity
Figure 28: Purchased cultural and creative products or services in the last six months, February 2019
Paper books/magazines and e-books/magazines are not mutually exclusive
Figure 29: Purchased cultural and creative products or services in the last six months, by selected spenders, February 2019
Young adults still enjoy reading paper books
Figure 30: Purchased Cultural and Creative products or services, by age groups, February 2019
Culture aficionados enjoy hands-on immersive cultural experience
Figure 31: Cross Table of Purchased Cultural and Creative products or services, by selected spenders
Family with children are more into cultural and creative activities and products
Figure 32: Purchased Cultural and Creative products or services, by family structure
Cultural and art lovers are more about individual characteristics and personal interest instead of income and city
Figure 33: Contact with cultural and creative industries – CHAID – Tree output, Feb 2019
ENCOURAGING STORE FEATURES
Products still come first
Figure 34: Features that encourage visits to a new store, February 2019
Younger consumers find beautiful interior design as necessity
In-store Chinese culture elements appeal to older consumers
Figure 35: The ranking of important new stores features, by age groups, February 2019
FAVOURITE IPS
No clear winner and half of respondents do not even have any favourite IP
Figure 36: Top 15 favourite IPs, February 2019
Figure 37: Types of favourite IPs, coded and classified from open-ended answers, February 2019
Young adults are more into IP fever
Figure 38: Knowledge of IP, February 2019
Figure 39: Types of favourite IPs, coded and classified from open-ended answers, by age groups, February 2019
Chinese IP is gaining the upper hand
Figure 40: Popular ips, by age groups
Figure 41: popular ips, by family structure
Figure 42: popular ips, by city
SOURCES OF KNOWING FAVOURITE IPS
Films and novels have more say in popular IPs
Figure 43: Sources of knowing favourite IP for the first time, February 2019
Men prefer movies and animation while TV dramas and social media are more popular among women
Figure 44: sources of popular ips – gender
IP market is so fragmented that it is hard to build a long-lasting IP
PURCHASE OF FAVOURITE IP MERCHANDISE
Strong bonding between favourite IPs and IP merchandising
Figure 45: Purchase of products that have been marketed with favourite IP, February 2019
Households with child(ren) have interest in buying IP merchandise
IP merchandise has to build the emotional connection to appeal to young adults
MEET THE MINTROPOLITANS
Mintropolitans are the target consumers for cultural and creative retailing
Figure 46: Changes in visiting cultural venues in the last six months, % of visiting more, by consumer classification, February 2019
Figure 47: Purchased Cultural and Creative products or services in the last six months, by consumer classification, February 2019
Figure 48: Types of Purchased Cultural and Creative products or services, by consumer classification
Mintropolitans are big fans of the IP trend and they are willing to pay for their favourite IPs
Figure 49: Knowledge of IP, by consumer classification
Figure 50: Types of favourite IPs, by consumer classification
Figure 51: Purchase of ip products, by consumer classification
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Abbreviations

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