China Media Mammoths Chase Silver Lining Amid Macroeconomic Malaise

Much like the rest of the world, the post-pandemic economic glow has faded rather rapidly in China. After a short burst of activity at the beginning of the year, the economy has taken a sharp downturn in recent months, with high youth unemployment, a slump in consumer prices and a major real estate crisis weighing on the world’s second largest economy. 

Economists are worried, and many polled by Reuters have slashed China’s growth outlook to 5% this year, down from the 5.5% growth forecast in July. And that pain will likely continue for the next couple of years, according to economists.

Despite this gloomy economic outlook, one indicator of the country’s media sector remains robust. According to Kantar BrandZ’s annual “Most Valuable Chinese Brands” report, the total value of the top 100 brands in China exceeded $1 trillion in 2023, and the Media & Entertainment category was once again the largest by total brand value, with 11 companies accounting for about 24% of total value. 

Brand value is the amount a brand contributes to the overall business value of the parent company, according to Kantar. It is calculated by taking the financial value of a company and multiplying it by brand contribution, which is the proportion of financial value generated by the brand’s ability to increase purchase volume and charge a premium. 

Tencent, which is included in both the Media & Entertainment and Business Technology & Services platform categories, was the most valuable brand for the third consecutive year, with brand value of more than $144 billion. One of China’s largest companies, Tencent has a portfolio of companies that includes video games, social media, e-commerce, fintech, streaming and cloud services. 

One area consumers are really fond of within Media & Entertainment in China is shortform video. The second and third most valuable Chinese Media & Entertainment brands on Kantar’s list are shortform video apps Douyin and KuaiShou.

Though TikTok is owned by Chinese company ByteDance, it does not operate in China. Douyin, the sister app to TikTok, is a more censored version that is used in China. It ranked number four in 2023’s list of most valuable Chinese companies, with brand value of nearly $47 billion. KuaiShou made the list at number 23, with brand value of more than $10 billion. It is similar to Douyin but used more for social interaction and livestreaming.

But what’s most interesting about the Chinese shortform video apps is their target market: “The silver economy,” the generation comprising those over 60 years of age, are much more digitally savvy and primed for e-commerce from the pandemic era. They are more engaged with shortform video platforms than ever before, and luckily for the Chinese economy, they also offer strong spending power. 

So even as there is immense uncertainty in China’s economy, the outlook for Media & Entertainment remains strong in China. According to PwC, total revenue in Media & Entertainment is expected to reach approximately $479.9 billion by 2027. The compound annual growth rate (CAGR) of 6.1% is higher than the average global rate of 2.5% over the next five years.