Publishing Conversations: The Magazine Market in China
At the Yale Publishing Course this week, Publishing Executive had the opportunity to speak with a couple of attendees from China: Chris Hu, publisher of Elle Decoration, and Quentin Li, editorial director and associate publisher of Elle Men. Both Shanghai-based magazines were acquired last year by Hearst in its mega-deal with Hachette, with the changeover to new ownership completed in December.
Both Elle brands are in the center of a burgeoning magazine market in China fueled by the growth of an affluent urban population. As China Daily reported last year, men's magazines, a relatively new entry in the Chinese media market, have enjoyed an annual growth rate of 30 percent since 2006.
PE:What is the most profitable area of the magazine business in China? Subscriptions? Newsstand sales? Ad sales?
Chris: Advertising, definitely. Because we put a lot of production costs into the magazine, the paper quality is much better than in the U.S. The printing cost is pretty high, so we don't think we can make money from newsstands right now. Maybe some magazines [in China] can.
Quentin: For glossy magazines like ours, you cannot make money selling magazines on the newsstand. There is a point where beyond that [number of magazines shipped] you are losing money because of the quality.
PE: Who are the major advertisers for you in China?
Chris: Fashion, beauty. Luxury brands. Jewelry.
Quentin: Luxury items. I am doing a men's magazine, so also cars. Watches.
PE: How is the magazine market changing? What is the most important factor behind these changes?
Chris: Several years ago, for fashion magazines, there were only a few. Ours was maybe the only one. It is the largest one; we've been in China for 24 years. Several years ago, Vogue entered the Chinese market. We also [now] have Cosmopolitan and Harpers Bazaar. There is new competition for print.
Quentin: The competition has gotten intense in the last two or three years. [The number of] male lifestyle magazines are increasing. That is why Hearst is doing Elle Men in China. It sounds a little bit weird, but Elle entered China in 1988, and it's a brand. It means fashion.
PE: So it is identified with fashion generally, not necessarily just women's fashion.
PE: You mentioned the distribution challenge in China. Why is it difficult to distribute magazines, and how does this affect your strategy for selling them?
Chris: Because China is such a large area, similar to the whole of Europe, in different provinces they have different policies for distribution. For some parts of China it's newsstand, in others the post office, [state-owned] stores—sometimes the policies are really different [from place to place]. So that's why its difficult to have the same standards for distribution.
Quentin: One of the biggest problems in China today is the gap between the rich and the poor: 'tier one' and 'tier two.' In the small cities and countryside [people] do not have the habit of reading magazines. But in big cities everybody is used to it. So you have different strategies in different places.
PE: Chris, you are the publisher of Elle Decoration, one of the Hachette titles acquired by Hearst last year. What has changed under new ownership?
Chris: For the group, we just changed the name. Nothing changed internally.
PE: You do not have Twitter in China. Is there an equivalent social media platform?
Chris: We have another [social website] called Weibo. It's a microblog [like Twitter]. It is more vivid maybe than Twitter.
PE: What is the most important social media platform in China when it comes to publicizing your magazine?
Quentin: I think Weibo is the most important in social media for magazines. Social media in China is becoming important for everybody [in publishing].