Barely a week passes without some mention of how the mainland is now Ground Zero for the world’s luxury brand marketers, eager to capitalise on the surging affluence of China’s elite consumers.
Foreign titles, unsurprisingly, have arrived in droves; from Elle’s launch in 1988, the country now plays host to the likes of Vogue, Harper’s Bazaar, Esquire and Cosmopolitan, along with local titles such as Rayli and iLook.
Foreign titles, unsurprisingly, have arrived in droves; from Elle’s launch in 1988, the country now plays host to the likes of Vogue, Harper’s Bazaar, Esquire and Cosmopolitan, along with local titles such as Rayli and iLook.
This year is expected to see rollouts by InStyle and Grazia. Published ratecard prices are healthy, with ROP rates that might make the most aggressive marketer blush. So why, then, are industry observers wondering whether the bubble is about to burst? Blame it, perhaps first, on a certain level of ennui with titles that claim exorbitant circulations, and rarely appear to offer anything different from their nearest rivals.
“There will be a shakeout,” says outgoing MindShare Shanghai brand team leader Cameron Romeril. “The rates are pretty good on a CPM basis, but they are a fraction of what they would cost in other markets. And they are certainly not making handsome profits off the sale price.”
Huang Hung, CEO at CIMG - which publishes iLook - disputes the assertion that the foreign-owned titles are not making a lot of money. But she agrees that readership levels are shrinking.
“They are all the same - lots of ads, lots of advertorial and bad content,” says Huang. “Chinese readers are not stupid. The bubble will burst very soon. Clients are getting more and more unhappy about the lack of audited circulation figures.”
As Qing Shen, who is heading up the FT’s upcoming Chinese-language wealth lifestyle title, explains, there are two things you should never ask about in China: “A woman’s age, and a magazine’s circulation figures.” But even leaving the figures aside, surely the growth in income levels bodes well for upscale titles?
“Overall, the market is still growing in China, although slowing slightly,” explains Carat China communication planning director Seth Grossman. “What is clear is that competition is increasing and with that, the strong will get stronger and the weak get weaker or even fade away.”
For upmarket players, this means honing product quality and thinking beyond the usual first-tier demographic that, it appears, every title is targeting. “Particularly as luxury brands expand into second- and third-tier cities, they realise that fashion magazines have next to zero penetration in these cities,” says Huang. “Already they are turning to television and internet as an alternative platform.”
This would explain why Cosmopolitan has just finished shooting a movie about fashion and why Vogue is planning to launch a TV programme. “As the market grows, segmentation becomes more complex,” explains Didier Guerin, president and CEO of consultancy Media Convergence.
“We need to understand the Chinese consumer better and magazine publishers are not investing enough research in China.”
