China's Wanda Cinemas, Movie Site Team on Movie Merchandising

2012-23 REP Wang Jianlin H

Wang suggests decentralizing film approvals.

Mtime has built official merchandise stores in 10 major cities.

China's largest theater group Wanda Cinemas has signed a deal with the country's leading movie site MTime to build merchandising centers in all of Wanda's top city theaters nationwide.

Revenue from movie merchandising has tended to be low in China because of rampant piracy, and box office remains the main source of revenue.

But with China set to become the world's biggest movie market at some stage in the next three years, news of developments in legitimate movie merchandising will be welcome to Hollywood studios trying to break into China and earn revenue through streams beyond the box office.

China's growing number of middle-class consumers is increasingly looking for genuine products, and deals are starting to happen. In May, Disney and Alibaba signed a merchandising deal around Avengers: Age of Ultron in China.

Wanda Cinemas is owned by China's richest man, Wang Jianlin, and welcomed 102 million moviegoers last year.

Wanda's deal with Mtime will allow filmgoers to shop for official merchandise right in the theater, while the two companies will also co-develop an O2O (Online-to-Offline) model, linking together online and offline users through the integration of Internet-connected devices.

"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," said Zeng Maojun, president of Wanda Theater Group. "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."

Mtime is China's top movie portal with 160 million unique visitors per month and the largest online ticketing and movie merchandising company in the country. Mtime opened its merchandising portal in January and since then has built stores in 10 major box-office cities.

China's film market is the second largest in the world and the fastest-growing major market, with growth of on average 30 percent year-over-year.

Kelvin Hou, Mtime’s founder and CEO, said the deal would enable studios to market their movies more directly and efficiently to Chinese consumers and deliver movie merchandising to an even broader audience.

"This is truly a win-win situation for all parties involved, which I believe will lead to the development of a new market model for the film industry," said Hou.