This past weekend, Disney’s The Force Awakens opened at the Chinese box office. Many feared the film would not do well in this market. Concerns ranged from the economic malaise of the country to the audience lack of familiarity with the subject. After all, the film was opening to a nation in panic with movie goers who hadn’t been part of the original cultural phenomenon. The film would surely suffer as a result.
The film opened to the best Saturday opening - ever - in the country, racking in $33M on opening day, and brought in $53M total for the two-day weekend. Those numbers are huge for a market that culturally accepts illegally distributed content as the norm.
So why would the Chinese go out in droves to see a film so few have heard of and so easily downloadable (by now)? Because China consists of a bourgeoning middle class who crave to ‘do stuff’ and ‘own things’ in a manner consistent with what others are ‘doing’ and ‘owning’.
The Chinese economy had been transitioning to a consumer-driven economy just like other advanced economies of the world. And just like in other advanced economies, lots of money can be made for businesses who recognize and cater to these needs.
Instinctively I believe there is nothing to fear regarding sales of top brands in the country. Why? Because folks, in a consumer-driven world peer-influence and status is everything. Disney did their homework marketing the Star Wars franchise to this audience, and the did so, well, well in advance to the movie opening. Think they are alone in this type of activity? Think different.
The time of the Chinese consumer has arrived, and just like you, they seek the same socio-economic status as other developed nations of the world. And they have the means to fulfill. Don’t believe me? Check out the article below on the Fool:
good news for Apple
…good news for DIS,
…good news for BIDU,
and not forgetting urbanization = more entertainment spending.
click link for my profile & holdings
Another source providing further evidence that all is well in China:
Regarding the pickup in consumer goods and services:
China’s services sector has been one of the few bright spots of the economy over the last year, and an official measure of the sector showed activity at a 16-month high in December, although a private-sector survey was more subdued.
Vehicle sales rose in November, and are forecast to grow 5-7 percent in 2016, faster than the 3 percent expected for 2015, while January-November property sales numbers showed a modest improvement.
There is also some anecdotal evidence that Chinese consumers are not expecting the economy to go over a cliff.
The Beijing Morning Post reported that many restaurants in the capital are fully booked for Chinese New Year’s Eve early next month - suggesting more people are planning to go out and spend rather than following the tradition of preparing their “reunion dinner” at home - while the latest “Star Wars” movie just enjoyed a record-breaking opening weekend in China.
Regarding the volatility of China’s stock market:
Such volatility is partly due to the peculiar make-up of a market where 80 percent of transactions are made by retail investors - a sharp contrast to Western markets where institutional and professional investors dominate.
Analysts point out that China’s stock markets also have less impact on the real economy than those elsewhere.
Chinese companies rely more on bank loans and less on capital markets for their funding than Western peers and investors make up only a small fraction of China’s huge population - there were just under 100 million retail investors at the end of 2015, data from China Securities Depository and Clearing Corporation showed, in a country of 1.3 billion.
“China’s equity markets move independently of its economy,” said the note from Capital Economics.
from Kevin’s link
Much of China’s GDP growth over the past decade has been driven by investing and exports, but China’s economy is now transitioning toward consumer consumption, which will only benefit consumer-oriented companies like Apple
So I don’t see how someone can say a shift to consumers will hurt sales of products that are purchased by these same consumers.
A shift to consumerism mean a shift of money from things that make things to the things themselves.
Here is a “rosey” view of what China’s economy will bring
The Royal Bank of Scotland (RBS) has advised clients to brace for a “cataclysmic year” and a global deflationary crisis, warning that the major stock markets could fall by a fifth and oil may reach $US16 a barrel.
The bank’s credit team said markets are flashing the same stress alerts as they did before the Lehman crisis in 2008.
“Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small,” it said in a client note.
Read more: http://www.smh.com.au/business/markets/rbs-tells-investors-s…
Follow us: @smh on Twitter | sydneymorningherald on Facebook