Business magazines eye China growth

Ask Thomas Gorman, the chairman and editor-in-chief of Fortune China magazine, which article he’s most proud of and he’ll say the cover story of the December 2010 issue. 


It was an exclusive interview with Jim Collins, the acclaimed business guru and writer, who spoke to Chinese chief executive officers about leadership. 


Released in 2001, Collins’ business book entitled Good to Great was a hot item around the world, including its Chinese language edition. 


Since the launch of the book, Gorman noted the number of Chinese mainland companies on the Fortune Global 500 list has increased from 10 to 42, in addition to an estimated 60 percent growth to 2,000 of Chinese companies listed on China’s stock exchanges. 


“Aside from distinguishing best practices to Chinese CEOs, we see such a story as engaging our readers and being relevant,” he said. 


Fortune China is circulated to senior managers in Chinese and international businesses and selected government officials in trade, finance and investment. 


Engaging readers and being relevant seem more essential especially in an attractive market such as China, where the marketplace for magazines has grown exponentially. 


Recalling when Fortune China was launched in 1996, Gorman said there were three business magazines then. “Today there are 150 (business) magazines.” 


Insights and depth


But Fortune China is not perturbed. Why? 


“Breaking news and market data are going to be owned online but magazines offer a particular niche in evolving business news. The tempo is different,” he said. 


From articles about General Electric, Siemens, or Nokia in the earlier issues of Fortune China, Chinese readers these days will find that the magazine content has included management stories about leading Chinese companies. 


Fortune China has a robust online version that doesn’t require subscription, targeted at a younger audience. 


Published 18 times a year, Gorman said Fortune and Fortune China magazines cannot be news magazines. “We have traditionally excelled in long-form business journalism, and we will continue to do so,” he said. 


In the media industry, Fortune journalists are known for spending two to three months to produce insights and depth along with great photos. 


The strong and attractive global brand of Fortune magazine helps too. Localizing the magazine without straying from its editorial core values and mission also set Fortune China apart from its competitors. 


Every year for 15 years, Fortune China has managed to increase its circulation with audited figures reaching 182,000 this year from 50,000 copies during its first year in China. 


“Overall, there is a strong demand for foreign as well as local business magazines in China, and I don’t see this changing,” Gorman said. 


In 2010, the revenue growth rate of magazines reached 19 percent at $2.37 billion, according to Beijing-based research firm CTR Market Research. 


China’s total advertising expenditure in 2010 rose 13 percent from a year ago. CTR said it is cautiously optimistic in forecasting that China’s advertising market this year will continue to outpace gross domestic product growth at a rate of 15 percent.


Social buzz


More and more advertisers are expected to take advantage of China’s booming online market. Online advertising revenues are forecast to reach $6.95 billion by 2012 and become the second-largest media for advertising in the country, according to a recent report by the Data Center of China Internet. 


“There are alternative media or platforms that offer their services and content at cheaper rates. That is competition for us,” said Graham Davis, managing director, China and Japan, at The Economist Group. 


“The online Chinese media is a big social buzz. China has jumped ahead of the rest of the world in terms of aggregator of news, advertisements and new ways of doing business.” 


Being realistic and not wanting to get caught up with the hype of doing business in China, he said the group is still at its drawing board, working on finding a suitable business model for The Economist magazine to be published in the Chinese language. 


The Economist Group is one of very few media companies that reported strong profits, revenues and circulation growth from The Economist magazine and Economist.com during 2008 and 2009, the years when most news organizations hemorrhaged staff, closed bureaus, reduced coverage, went bust or dipped into the red. 


Fierce competition


Elle, the French-based magazine for women, published in China for 22 years, is heading to second-tier cities this year. 


“We’re pushing for expansion and presence in other cities. Despite the cut-throat competition, we aim to remain in the No 1 spot,” said Jean de Boisdeffre, CEO International, Magazines of Lagardère Active Group of France. 


Two months ago, Hearst Corp agreed to pay $887 million to Lagardere SCA to assume control or part-control of 102 magazine editions in 15 countries, including the publishing rights to Elle magazine outside France. 


The acquisition adds Elle to Hearst’s existing portfolio that includes Harper’s Bazaar, Marie Claire and Cosmopolitan, ramping up competition against industry giants such as Conde Nast, publisher of Vogue and Glamour, and Time Inc, publisher of InStyle. 


Until the acquisition process is completed, for now, Elle’s close competitors such as Cosmopolitan, Harper’s Bazaar and Vogue magazines have mounted fierce competition in the women’s magazine business in China. 


But Elle is still the leader, he said, “as it’s highly appreciated by advertisers and readers” because of the value, branding, and satisfaction that the premium magazine gives. 


To keep abreast of competition, Elle China has evolved to offer two magazines for the price of one. Other beauty or female magazines have followed suit.


To keep the magazine’s growth momentum in China, Elle is now available on the web and, in February, Elle Men China edition, a monthly magazine, was launched. 


Right balance 


There is very little that troubles Bloomberg LP. While news organizations are downsizing or worrying over new business models in a changing media landscape, Bloomberg is still hiring but never rehires those who quit, and remains electronic — certainly for the future. 


To add to its astounding growth story, Bloomberg brought its monthly magazine to China last year. 


“Working with our new China partner, Modern Media Holdings Limited, as well as our existing partner, CCTP, Bloomberg Businessweek/China will provide readers with Bloomberg’s indispensable global business content as well as a significant amount of local coverage created with the growing Chinese business audience in mind,” said Paul Bascobert, president of Bloomberg Businessweek. 


Banking on analytics, data, news and information from 2,300 journalists worldwide, including more than 100 in China, Bloomberg Businessweek hopes to “provide the right balance for advertisers and readers”, he said. 


Modern Media Holdings Limited will manage and be responsible for the content of Bloomberg Businessweek/China, which will be published in simplified Chinese.

China Daily Asia Weekly on May 20, 2011, page 19