China’s Film Industry And Its Bollywood Future

Ben SimpfendorferContributor


I’ve heard many ways of comparing China and India. Most focus on China’s superior infrastructure or India’s volatile politics. They are relevant points, but they also overlook one of the more striking differences between the two countries: Hollywood accounts for 60 percent of China’s box office revenue, whereas the figure is less than 10 percent in India.

How to explain the gap? Can Chinese moviegoers really be such big fans of American blockbusters? And why do Indian film fans flock to local films?

You might wonder if you’re looking at box office receipts in 2014. TransformersInterstellarX-Men, and Captain America were all huge Top 10 hits in China. But in India, there wasn’t a single Hollywood film in the Top 10 list. To me, this deserves as much attention as infrastructure or politics, as India’s film market says a good deal about the future challenges for the world’s biggest brands.

To start, there’s a crucial difference between the two markets. India’s film industry is highly fragmented and tailored to local markets. Hindi-language Bollywood films account for less than half the total market. Tamil-language films account for a similar share, with other local-language dialects, such as Telagu and Kanada, making up the rest of the market.

I’m a big fan of Hindi- and Tamil-language films. But they are very different types of films. As one Indian film critic explained to me, “You could pass a Tamil-language film star in the street and never recognize them, unlike the Hindi-language Bollywood film star.” And that’s because Tamil-language films are more likely to target local audiences with local themes.

It’s a very different story in China where there are far fewer films targeting local audiences. The country’s biggest film directors instead decided to take on Hollywood directly by producing big-budget costume dramas. That might have worked during the 1990s and 2000s, but it’s a strategy that’s now struggling.

However, there are early signs of China’s ‘Bollywood-ization’ as there is a new crop of low-budget films emerging. Take Guo Jingming’s Tiny Times or Xu Zheng’s Lost in Thailand. They aren’t necessarily reviewers’ favorites, but they are big commercial hits, and most importantly they are beginning to grab market share.

Here’s the challenge then for Hollywood and all foreign multinationals looking to sell in China. There’s certainly an appetite for globally branded products. But consumers are increasingly looking for more localized offerings, whether that’s a film touching on local issues or a laundry product tailored for local consumers.

Indeed, most of the world’s biggest fast-moving consumer goods companies have already seen their share of retail store space fall steadily in China as a result of this change in consumer preferences. And, to judge by India’s experience, I would be very surprised if Hollywood still held a 60 percent market share in five years time.

It’s of course still possible to win in this environment. Disney’s experience in India is a good example. Having struggled to penetrate the local market, Disney instead opted to buy a local film studio, UTV. I’ve since watched UTV-produced films and it’s hard to spot the Disney logo. The corporate website also doesn’t make a huge deal about its parent company.

However, the fact that one of the world’s most powerful brands realized that its capacity to make money wasn’t in the brand but rather its ability to run a studio and distribute films is an important lesson. It implies that to succeed in today’s increasingly fragmented Asian markets means rethinking your value proposition and market segment.

In the meantime, it’s a terrific outcome for consumers who will find themselves spoilt for choice. And for myself, it’s a pleasure to choose between Main Tera Hero and Raanjhanaa or Lost in Thailand or Tiny Times on those long-haul flights.

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