It seems like every U.S. industry is aiming to get in on the emerging Chinese consumer market. After all, what's not to love about more than a billion potential customers, many of whom belong to a rapidly growing middle class?
We couldn't help but consider this unmistakable trend upon learning that the Academy of Motion Picture Arts and Sciences received a multimillion-dollar gift from the Dalian Wanda Group, a Chinese conglomerate with holdings in real estate, tourism, hotels, and entertainment. The gift will help the organization design and build the Academy Museum, the world's "leading movie museum."
From the Academy's perspective, the gift is welcomed for two reasons. One, of course is that it's cold hard cash. Slated to open in 2017, the nearly 30,000-foot Academy Museum will include state-of-the-art facilities, theaters, screening rooms, education centers, and special event spaces. But you can bet Academy members are looking far beyond 2017, and that's because China is the fastest-growing market for filmgoers in the world. The country generated close to $3 billion in box-office revenues in 2012 — a staggering 30% increase over 2011.
This increase is due to a profound, liberalizing culture shift across the country that has altered how Chinese consumers view entertainment. Previously, Communist officials hand-selected propaganda-heavy films for public viewing. Now, however, thanks to the gradual introduction of foreign films, Chinese consumers are increasingly finding the idea of checking out a film as, well, fun.
Meanwhile, the Dalian Wanda Group hopes this donation will expand its foothold in the American and global film industry. As previously noted, the conglomerate has holdings in real estate, tourism, hotels, and entertainment, and we can certainly think of multiple "synergies" that can develop in coming years — the construction of new cinemas with American assistance, licensing agreements, cross-promotional advertising campaigns, and more. With the explosion of cinema in China, it makes economic sense for Chinese firms to work closely with their American counterparts.
What makes this donation even more interesting is the fact that it is somewhat anomalous in nature. Although China now has more billionaires than the United States, philanthropic giving hasn't exactly caught on there. Indeed, according to some estimates, Chinese philanthropic donations equal just 4% of total U.S. giving. Furthermore, while U.S. companies often donate to organizations supporting, say, carbon dioxide reduction in China, it is relatively rare to see a Chinese firm donate to a U.S. organization.
Of course, with China having a billion consumers and counting, don't be surprised if this trend changes as well.