China’s Wanda Deepens Investment in Fast-Growing Movie Merchandising Sector

Wang Jianlin, chariman of Dalian Wanda and China's richest man

China’s largest cinema chain has acquired a 20 percent stake in online ticketing and reviews service Mtime, with plans to roll out movie merchandise stores nationwide.

China’s largest movie theater group, Wanda Cinemas, has acquired a 20 percent stake in movie ticketing service and reviews site Mtime. The news comes after the two companies signed a deal in July to co-build movie merchandise stores in Wanda's theaters nationwide.

The terms of the acquisition were not disclosed, but the new partners outlined their plans in a joint statement. In January, Mtime launched an e-commerce platform for licensed movie merchandise and proceeded to build ten brick and mortar stores in major Chinese cities, laying the groundwork for an online-to-offline (O2O) retail model. The company also established a "merchandising research center."

The partnership will allow the companies to rapidly scale the new movie merchandising business, combining Mtime’s deep reach online – as the country’s most popular movie-themed site and online service, it claims some 160 million monthly users — with Wanda’s cinema chain and commercial real estate muscle. Wanda controls a large swath of China’s most valuable urban property, operating sprawling office, shopping, hospitality and entertainment complexes in the centers of virtually all of the country’s major cities. The new movie merchandise outlets will give Chinese consumers an opportunity to buy legitimate movie goods as soon as they step out of the cinema. 

The deal should come as welcome news to Hollywood studios. Throughout the rapid rise of the Chinese movie market, merchandising has remained an underdeveloped sector, owing to rampant piracy. But as the market has matured, China’s growing number of middle-class consumers has begun to prefer legitimate products, while official tolerance for copyright infringement has diminished as more Chinese companies have popped up with IP of their own to protect. In another sign of the sector’s growth, Disney and Alibaba signed a merchandising deal in May around the China release of Avengers: Age of Ultron.

“As the largest theatrical group in China, Wanda has been researching this area for a long time,” said Zeng Maojun, president of Wanda Theater Group. “This partnership will provide the most complementary product designs and offerings to best meet the Chinese consumers' needs, with a one-stop shopping experience when they come to our theaters.”

He added: “This also marks an important milestone in China’s movie market, the first time a Chinese company is launching this scale of resources into movie merchandising.”