Young consumers drive tech-based biz

Anime, comics, gaming, novels or ACGN segment sinks roots deeper in China market

On a cold winter evening in Beijing, Cai Yi, 26, an auditor, spent several minutes indulging in his favorite pastime－watching live-streaming of a cosplay dance show on Bilibili, a popular Chinese video-sharing website.

Cai has so far spent more than 10,000 yuan ($1,540) to watch the fun on Bilibili and other video-sharing platforms and to send virtual presents to hosts who dress as characters from anime, comics, (video) games and novels－known as ACGN.

He even bought a virtual television for 1,245 yuan, the most expensive virtual gift on the platform, to show support and affection for the hosts he likes.

His favorite cosplayer is Mayuri. With elaborate costumes and impeccable hair, the young cosplayer successfully transforms herself into characters such as Sakura Matou, one of the three main heroines of Japanese visual novel game Fate/Stay Night.

"She's so cute, and looks exactly like the character I love," Cai said. "I'm currently in her fan group. Once I receive the message for new updates, I'll sit in front of my PC and wait to watch her live dance show."

Cai is among hundreds of millions of young Chinese fans of ACGN, and their ranks are swelling. As the digital-savvy younger generation, particularly those born in the 1990s and 2000s, command rising purchasing power, the previously marginalized ACGN culture is gaining momentum.

Wang Xiaohui, chief content officer of online entertainment services provider iQiyi.com Inc, said at an innovation forum in early December that the cultural and business development of ACGN will be a new trend－an exhibition of mass culture as mainstream entertainment.

"Given the big market, the large population, uniform culture and market forces, we'll see more opportunities in the future," Wang added.

High-definition smartphone screens, powerful processors, innovative mobile internet technologies and versatile software have made on-screen reading and video-watching pleasurable and convenient, industry experts said.

According to the China Internet Network Information Center, there are 751 million Chinese netizens, and 96.3 percent of them also access the internet using their mobile phones. This provides a large user base for the evolving business.

Chen Rui, chairman of Bilibili, a popular video-sharing site which boasts the largest group of young Chinese ACGN fans, said there was a clear difference in the demand for culture and content between the younger generation and their parents.

"The increased material wealth, high-quality education environment and the access to internet services are shaping today's young generation's diversified and personalized cultural needs," Chen said.

According to a report released by Shenzhen-based consultancy firm CI Consulting, China had more than 300 million ACGN fans by the end of 2016. Their passion is expected to create a market worth 600 billion yuan by 2020.

Dong Minna, an analyst at Beijing-based internet consultancy Analysys, said the whole industry chain surrounding the ACGN culture was at an early stage of development, and the market would kick into a higher gear after three to five years.

"ACGN lovers are actually the post-2000s teenagers who currently lack strong spending power," she said. "After three to five years, they will spur fresh demand as their pocket money will increase.

"Such young groups have a high degree of loyalty to things they really love, like the ACGN culture. And they also tend to be picky about content and services. But once they select specific ACGN content and a services platform, they will be willing to pay for what they like, such as comics, watching online anime or playing related video games."

Sensing the potential for big business, internet giants Baidu Inc, Alibaba Group Holding Ltd and Tencent Holdings Ltd have invested in their entertainment arms.

Bilibili received more than 100 million yuan in investment led by Tencent in 2015. Over several years, it cultivated the subculture markets to monetize the potential in the new trend.

The company, which boasts the largest group of young fans for ACGN, is reportedly planning an initial public offering in the United States that could raise at least $200 million.

Unlike traditional video sites such as Alibaba-backed Youku Tudou and Baidu-backed iQiyi, Bilibili features more youth-oriented content and provides several features to attract younger users. For instance, it offers bullet screen function that allows users to post real-time comments that dart across the screen.

This has helped create a large user base for Bilibili, according to a report by mobile data intelligence firm Jiguang. Bilibili had already amassed nearly 60 million monthly active users by July 2017, up 40.1 percent from February.

According to the Jiguang report, more than 90 percent of Bilibili's users are under 30, and over half are young users aged from 20 to 24.

Alibaba and Baidu are also gearing up to expand into ACGN-related businesses, trying to catch up with rival Tencent. Alibaba-backed Youku Tudou and Baidu's video streaming site iQiyi have been generating professional-grade content to cater to users' increasing need for entertainment, particularly ACGN content.

Dong from Analysys said the competition in the ACGN area is really fierce now.

"A wide range of companies have entered the new area, buoyed by the supportive government policies (for innovative firms) and the development of new technologies like artificial intelligence. They need to figure out those young fans' specific needs and be able to provide services accordingly," Dong said.