iFensi is opening a new door for fan economy: ‘fan banks’

If you were in New York City’s Times Square on September 21 last year, there was a high chance that you would notice birthday messages for Karry Wang, the leader of idol group TFBoys from China, on 10 large screen advertisements purchased by his fans.

Just a month later, the Chinese fans placed large screen ads once again at the exact same spot in an effort to promote their idols, including another TFBoys member Roy Wang this time. This was part of the promotion campaign that China’s fan service website iFensi created.

Promotion ads of Karry Wang and Roy Wang in New York City's Times Square. Photo from iFensi.
Promotional ads of Karry Wang and Roy Wang in New York City’s Times Square. Photo from iFensi.

Behind these shimmering LED displays and extravagant splurging on idol promotions are the power of fans from China. With the rapidly growing fan base in China, the entertainment industry, especially those companies dedicated to fan service, is making a huge fortune through this phenomenon. And iFensi is one of them.

“iFensi is a new company. A new team with an old brand,” said Liu Chao, CEO of iFensi, in an interview with AllChinaTech at his office in Beijing.

Founded in 2005 in China, iFensi was known as a go-to place for fan services and was later acquired by a Korean entertainment company. However, by the end of 2013, the business failed with only three employees left in the company. In October 2014, Liu Chao decided to purchase the brand back to China with the help of some early investors. He assembled a new team and the business started to take off.

The 32-year-old Liu Chao
The 32-year-old Liu Chao, iFensi’s CEO, said that the company is seeing a massive growth this year. Photo by Timmy Shen/AllChinaTech.

In March 2016, iFensi closed its Series A financing round with RMB 50 million (USD 7.3 million). Later in April 2017, the entertainment company landed RMB 150 million (USD 22 million) for its Series B financing round and it is now valued at an estimated RMB 1 billion (USD 147 million). This not only shows success of Liu’s business strategies, but it also indicates that the fandom market in China has grown bigger than ever.

China’s booming fandom power

“I believe the fandom market in China is ‘upgrading’ year by year,” said Liu with a smile.

“Bids for just a seat in our live streaming video studio can go up to tens of thousands of yuan,” said Liu, pointing to the studio just outside his office. The studio hosts various kinds of video streaming shows produced by iFensi, where idols appear and play games with the hosts and fans both in the studio and online.

iFensi often broadcasts live online from the studio. Photo by Timmy Shen/AllChinaTech.
iFensi often holds live online broadcasts in this studio. Photo by Timmy Shen/AllChinaTech.

Liu said that the flourishing fan economy scene in China is the major driving force for the company. Thanks to the Internet, fans have more channels and options to follow their idols and support them. According to an iFensi report in 2016, the fan base in China has increased to 470 million people in 2016 with a steady growth of 40 million people year-on-year.

Also, online video streaming sites and live streaming platforms have led to the rise in a group of celebrities that may not have so much fame and exposure on mainstream media, but are wildly popular in niche markets. For instance, actor Xu Weizhou who became popular after playing a gay character in a web television series along with Jiang Zile who also acted in another web series, are both quite popular on iFensi’s platform, according to Liu.

“Often times, this kind of idols would have some pretty crazy fans,” said Liu. “It’s quite normal for these fans to buy over a hundred of membership accounts just to vote for their idols to ascend on our ranking list.”

Liu stressed that this is a trend in China that iFensi has spotted and is focused on expanding this business.

The fandom business model

Just like other Internet companies, iFensi resorts to advertisements, e-commerce, and virtual value added services to monetize its services.

iFensi sets up a membership package that allows fans to buy virtual gifts to support their idols during an online live streaming show. The fans who purchase the membership package can also receive a “heart” each day which is used to vote for their idols to ascend on iFensi’s ranking list.

Liu stressed that the power of fan clubs in China are getting bigger than ever. Fan clubs are serious businesses and are professionally organized with lots of volunteer managers. Just on iFensi, there are 14,200 fan clubs in which money spent on supporting their idols has surpassed millions of US dollars annually.

“The fan clubs are a lot more organized and disciplined than before,” said Liu. “Their plans to leverage their resources have become more strategic, and they also have more and more money to put to use as well,” said Liu.

This is why Liu came up with this idea to help those fan clubs manage their wealth. Last month, iFensi launched a “fandom bank” financial service for fan clubs with a third party financial partner.

In the past, it is often the leaders or board committees of the fan clubs who have the power to control the money. “This is not entirely safe. What if the manager takes the money and run?“ said Liu.

“Fan clubs can save money here [with us],” said Liu. “Other than providing the wealth management service with interests, we can also give you discounts if you ever want to throw some celebrations or to put up ads to promote your idols.”

Launching the financial product just last month, iFensi has had about 40 fan clubs sign up for the “fandom bank” service and hopes to engage over 1,000 fan clubs by the end of the year.
It is a bold strategic move for iFensi to step forward with its financial management product, but Liu believes that this is the next trend in the fan economy and the company is definitely not going to miss it.

“Before our Series B financing round, we focused more on how to get users to engage with us and spend more time here,” said Liu. “But now after the B round, we have to think more about getting fans to put their money here.”

Perhaps in the near future, putting up promotion advertisements in Times Square for idols like Karry or Roy will not cost a fortune for the fan clubs as it does now, thanks to the power of fans.

(Top photo from Baidu images)

Read also: Fans bring China’s fandom power up another notch

Fans bring China’s fandom power up another notch

In China, it is getting easier for companies to earn money from fans.

On Weibo, China’s equivalent of Twitter, the most shared post is not of an adorable animal video or some random social media post from a president of a certain country, but it is from a teenager who has millions of fans in China.

“I’m 15 years old today. Thank you all for being with me all these years…,” wrote Karry Wang on Weibo. Wang is the leader of TFBoys, an extremely successful boyband that took China by storm since debuting in 2013. The birthday message was posted in September 2014 and has been shared over 350 million times, remaining the most shared Weibo post according to Guinness World Records.

In fact, Wang’s fans are more than willing to spend a fortune on just a mere birthday celebration. In 2016, his fans celebrated his 17th birthday by purchasing media advertisements to put up birthday messages on iconic buildings and newspapers around the world. Those messages appeared in New York City’s Times Square on 10 large screens, on tour buses in Seoul, and in subway stations in Japan. Even Iceland’s local leading newspaper celebrated Wang’s 17th birthday with a half-page advertisement purchased by fans.

According to an iFensi report in 2016, the fan base in China has increased to 470 million people in 2016 with a steady growth of 40 million people year-on-year. The report also stressed that activities like Wang’s massive birthday celebration are key factors to scale up the market size.

With the rapidly growing fan base in China, this is how the entertainment industry makes its money through the power of fans.

Among all the fan websites in China, iFensi stands out with its various kinds of services for fans. Liu Chao, iFensi’s CEO, told local press 36 Kr that it serves 14,000 fan clubs in which money spent on supporting their idols has surpassed millions of US dollars annually.

Aside from purchasing ads to support idols, fans have other options on its platform as well. iFensi has launched several “competition campaigns” where the website puts up an online “race” among the most popular stars to urge fans to purchase virtual points to help their idols win. The latest campaign “Go! Idol” for instance asked fans to buy points for their idols. Stars with the most number of points could win a promotional space on iFensi’s website and app.

iFensi’s “competition campaign” where fans can buy virtual points on WeChat to support their idols. Screenshot from iFensi’s WeChat account.
iFensi’s “competition campaign” where fans can buy virtual points on WeChat to support their idols. Screenshot from iFensi’s WeChat account.

Those fan “empires” can lead to business opportunities worth millions of dollars. For instance, iFensi recently landed RMB 150 million (USD 22 million) for its Series B financing round and it is now valued at an estimated RMB 1 billion (USD 147 million). This shows that the fandom market in China has grown bigger than ever.

Fan clubs are serious businesses and are professionally organized with lots of volunteer managers. For example, Lu Han, a 27-year-old Beijing-born superstar who is regarded as China’s Justin Bieber, has numerous fan clubs around the world. Debuting in 2012 as a member of the South Korean pop group EXO, Lu soon gained popularity in Asia and later returned home in 2014 after ending his controversial contract with the Korean group.

Lu received an incredible welcome back home. Lu’s fan club Lu Han Bar on China’s online forum Baidu Tieba has 3.25 million registered members, and is probably the country’s largest fan club for Lu. It has about 300 volunteer managers in 33 branches in China and other countries including the U.S. and Australia.

This is what they do. Every day, the managers update Lu’s latest schedule, news, photos, and videos on fan sites and social media. According to a Global Times interview with one of these managers, the club’s only income is from self-made items related to the star, and the money earned from sales are used for activities related to Lu. For example, the group has carried out charity work in Lu’s name for years.

Aside from the usual ways of earning money from fans such as selling items related to their favorite stars, companies dedicated to fan service now have more options to test the market. With all these fans’ desires to promote their idols, China’s entertainment industry will see an even brighter future and a market with vast potential.

(Top photo from Baidu images)