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Industry News

A big step in China film licensing By Alice Yang, Daisy Wang

The Wandering Earth film was on for the first day of Chinese New Year, February 5th. One month later, the film gained RMB 4.5 billion at box office, now is the second biggest box office film in China. The Wandering Earth was adapted by the novel of Cixin Liu, telling a story of escape plan when the solar system going to destruction. This movie also created a new record with gaining 2 billion RMB box office in 6 days, breaking the record of Wolf Worries 2 in Chinese film history.

 

The Wandering Earth, the black horse at box office was considered as the first science fiction movie in China. It is not only a step from nothing to something in Chinese science fiction movies, but also a big step in film licensing for Chinese film makers.

 

More mature Chinese film makers’ licensing business

 

In terms of licensed products, the licensing category of The Wandering Earth has covered all the major licensing merchandise fields, including toys, models, apparel, accessories, electronics, food and drinks, houseware, baby products, and etc. Many of them received a great welcome in the market. Among the licensed products, the outstanding ones are the engine model Sulawesi-03, van model CN114-03, bucket truck model CN373 and Bluetooth speaker in the shape of a planet.

 

Besides the licensing products you can buy now, they also prepared more to have in the future. The producer, China Film Group Corporation initiated three co-funding programs on Taobao platform, to raise money for licensed products. All the co-funding programs witnessed a huge success that RMB 92 million had raised, and the licensed vehicle model reached 7819% of the target funding amount.

 

Only less than two years ago, the top movie in Chinese box office history, Wolf Warriors 2 harvested more than RMB 5.6 billion. However, only RMB 2 million sales was made in their licensing retails, which cannot be compared with the box office. But even at that time, the licensed products already included toys, models, accessories and housewares, acted as kind of a good try in film licensing in China. 

 

Good news is not only The Wandering Earth is trying. Last Chinese New Year, in February 2018, the comedy Monster Hunt 2 won a not bad performance in the box office, created a new record in one-day box office of RMB 0.5 billion. More importantly, the company launched a quite mature licensing business model when the movie was on.

 

The previous movie The Monster Hunt in 2015, got nothing from licensing business expect for RMB 2.4 billion box office. When it came to the second movie, things had changed. The film producer planned and prepared licensing one year before the movie launching. According to the producers, they had corporations with more than 50 licensee companies and gained about RMB 10 million from the licensing merchandise retails. It was a big success in film licensing in Chinese market.

 

Compared with Wolf Warriors 2 and Monster Hunt 2, The Wandering Earth made a big step in the way of Chinese film producers in licensing business. Not only they realized the importance of licensing business model, and launched the licensing products in time to the market, but also they paid much more attention and efforts in the design, creation, and quality of the licensing products.

 

According to China Licensing Industry Report 2018, issued by China Toy and Juvenile Products Association, when asked about the price which consumers willing to pay for licensed merchandise compared with regular products, over 36 percent of the investigated consumers accepted the price over 50 percent increase, which is very good news to the industry. The willingness of consumers to pay for the licensed products is the foundation of the industry growth.

 

More popular theme space licensing

 

Meanwhile, licensed theme space becomes a new trend in Chinese licensing market. With the theme space setting up, films, co-productions, retail shops, they're creating an ecosystem to bring consumers in and foster a broader buzz and awareness, by theme space licensing together with retail sales. For example, The Wandering Earth this time also cooperated with Honeymoon Dessert and launched a themed set of desserts.

 

In spring of 2018, the co-promotion between the Monster Hunt 2 and McDonalds was a huge success too. They launched a series of new kinds of custom-made food and decorated McDonalds stores with characters in movies when the Monster Hunt 2 was hitting, achieved a win-win situation.

 

According to China Licensing Industry Report 2018, licensees in theme space took 7 percent of the whole Chinese licensee industry pie, most impressive increase last year. Theme exhibitions in the shopping mall, theme coffee bars, theme restaurants, theme convenient stores, theme plane and metro… witnessed a booming in recent years.

 

Chart: Licensees by industry category in China 2018

 

 

(Source: China Licensing Industry Report 2018)

 

 

As China’s licensing industry getting more mature and continuously increasing economy, its consumers who earn more money are more willing to spend money on what they want or want to experience, instead of what they need. That releases more potential room for the theme space to grow as well.

 

(About the Author: Licensing Project Manager of China Toy & Juvenile Products Association)

 

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