Current Market

The Chinese government strictly controls the number of magazines published in China.  There has been a steady increase in the number of magazines from 1995 to 2000, while the same period has seen a steady decrease in the number of newspapers in China, reflecting a slight softening of the government's tight control over the number of magazines.

The State Press & Publication Administration (SPPA) classifies magazines published in China into seven categories: general interest, social science, science & technology, culture & education, art & literature, children and pictorial.

Magazines of general interest and social science are the only two categories that have seen growth in both magazine numbers and their percentage of total magazine titales over the period of 1998 to 2000.  This trend reflects increasing market demand for magazines of the two categories over the last several years in China.

As displayed above, the ever-increasing printed copies of magazines demonstrate that the China magazine market has been growing in the last several years.  Of the seven categories, the categories of general interest, science & technology, children and pictorial have seen growth in their circulation.

With the growing China magazine market, competition is becoming more intense.  While both numbers of magazines and circulation are increasing, the market is more fragmented with the fact that average copies per issue for one magazine were much smaller in 2000 than the previous year.  The general interest category has seen the most significant increase in competition.

It is also noted that the number of monthly magazines as a percentage of the total has been increasing during the 1998-2000 period, while the perccentage of both bimonthly and quarterly magazines has become smaller over the same timeframe.  Still, the absolute numbers of bimonthly and quarterly magazines have been on the upturn.

Two Business Models

By profit structures, magazines in China may be classified into two groups:

• Magazines making most revenues from large circulation
• Magazines making most revenues from ad sales

Magazines adopting the first business model target low-income readers, while those adopting the second model achieve their revenues mainly by advertising and targeting higher-income readers like managers and well-educated and wealthy women.

It is seen from the table above that in 1999, revenues from magazines advertising accounted for 8.7% of the total magazine revenues.  In 2000, the same percentage grew to 9.3%, indicating China's magazine market is shifting to the ad sale-driven model.  With China's large population of rural people whose incomes are relatively low, however, magazines whose costs are low and rely heavily on magazine sales will have a large market share for a long time.

Foreign Involvement

To date, Hearst Corp., Hachette Filipachi and other foreign companies are all involved with Chinese-language magazine titles, and there are estimated to be more than 100 magazines now produced in China with foreign involvement.

These examples cover a range of collaborative agreements that include:

• Foreign partner provides all or part of the copyright, and has no other involvement
• Foreign partner provides the copyright and is involved in publishing

According to a China Concept Consulting survey, magazines with foreign involvement are more satisfied with their performance in China than magazines without foreign involvement.  Measured on the dimensions of management, editorial, content resources, marketing and promotion, ad sales, distribution, talent retention, government relations and financing, a comparison of their performance is profiled below: