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)

Personalized e-commerce site for post-95s lands USD 3M in Series A financing

Photo from Baidu Images
Wang Kaixin, CEO of ShenqiBuy. Photo from Baidu Images

How does a latecomer to online shopping steal the market from e-commerce giants such as Taobao and JD.com? One way is to target a specific group of consumers. Wang Kaixin, a 17-year-old high school dropout and CEO of “ShenqiBuy”, is ambitiously entering the game by targeting users her own age.

“ShenqiBuy”, or “MagicBuy” in English, is an e-commerce site founded last September in the southern Chinese city of Shenzhen that targets the post-95 generation of young Chinese people. It landed RMB 20 million (USD three million) in Series A fundraising only three months after the launch of its app from notable investors including Matrix Partners China, Zhen Fund, and Shenzhen-based InnoValley, which also invested several million yuan in its angel financing, reported tech media outlet Cyzone.com on Wednesday.

Wang said this round of funding will be used to expand the team and update the app. She plans to double her team from the 50 staff it has right now to 100.

With Doge, a dog meme popular with young people, as the website’s logo, ShenqiBuy sells snacks, accessories, stationery, backpacks, and other things to teenagers who are into the cute, new and trendy.

Screenshot from ShenqiBuy app
Screenshot from ShenqiBuy app

Deviating from the common practice of dividing goods by category, this app uses the latest trends among middle schoolers as tags. For example, Japanese animation, Korean boy band EXO, popular Chinese post-90s boy band TFBoys and the like. A professional team of buyers post daily recommendations on the app, using comments from frequent consumers. In this way, high-schoolers who have little time to shop online get easy access to what they want.

The e-commerce site came out of Wang’s high school experience selling things to her classmates. Under strong opposition from her family, she insisted on dropping out of high school and starting her own company.

She said her advantage is that she knows her target consumers very well. She says teenagers want things that are funny and affordable, because they only need them for entertainment, to impress their classmates or to stand out.

“The top three bestsellers are an umbrella with a cartoon banana on it, a potato chip handbag and a plastic watch with a fruit logo,” Wang said.

Wang said 80% of goods sold on the platform are priced between RMB 10-100, in accordance with the consumption habits of teenagers. According to a survey conducted by the company, 75% of post-95s have less than RMB 1000 to spend every month.

Wang claims to have 300,000 registered users on the platform and to have received more than 1000 daily orders as of January 2016.

China now has more than 200 million post-95s, 90% of whom are internet-driven. According to TalkingData, a mobile data analysis platform, 36.5% of China’s mobile device users are under the age of 25, as of last December.

Top 4 hottest topics on Chinese social media this week

Yang Lai

AllChinaTech brings you the four most talked-about topics this week on Weibo, one of China’s largest social media networks.

Obama

4. Change your ugly ID photos
(2.96 million pageviews, 2,991 comments)

Everyone hates their ID photo. But for a long time in China, there was no way for people to change their photo on their official IDs. Last week, the Shaanxi provincial government released new rules allowing people to take another photo if they are not satisfied. Many Weibo users are endorsing the new rule and are calling for other provinces to do the same.

CES2

3. CES 2016
(14.6 million pageviews, 10,000 comments)

CES 2016 kicked off last week in Las Vegas. It is estimated that there were over 160,000 attendees, including 1300 companies from Greater China. Nearly 30,000 new products were launched. The hottest new products to come out were autonomous cars, smart home products and wearable gadgets.

circuitbreaker

2. China’s circuit breaker mechanism
(32.5 million pageviews, 11,000 comments)

Trading on the first day of 2016 closed earlier than expected in China, as a 7% slump triggered the circuit breaker mechanism to suspend the stock market. The circuit breaker was tripped twice this week and suspended on Thursday after having none of its intended effect. Weibo users found a much more suitable name for the mechanism: the Financial Unusual Ceasing Kit, or F**K for short.

BJsmog

1. Help Beijing inhale smog
(54.2 million pageviews, 108, 000 comments)

A video clip of Chongqing-based teen pop stars Tfboys, a Chinese boyband, went viral online. After landing in Beijing, Roy, one of the three boys, was told not to open the car windows by the band’s assistant. He responded seriously, “what do you mean? We should help inhale some of the smog for our Beijing brothers and sisters.”

(All photos from Baidu Images; the number of pageviews and comments was counted on Sunday)