CJ Group plans to increase the proportion of overseas sales in its culture business by more than 50% by 2020
CJ Group (CEO Lee Jae-Hyun) declared that it would take a great leap as a global culture company by increasing the proportion of overseas sales in its culture business by more than 50% by 2020. This vision is designed to enable it focus on globalizing K-culture and securing a next-generation growth engine for the Korean economy.
CJ Group held a press conference at the concert hall of KCON in LA on July 30, to present its vision and strategies for the culture business. This event served as an opportunity to provide a briefing on the blueprint of 'A Leap into the World's Top 10 Global Culture Company by 2020' that had been presented at the 'Media Seminar to Mark the 20th Anniversary of CJ Culture Business,' held in September last year. Participants included major executives of CJ Group’s affiliates in the culture business sector.
“We will make every effort to increase the proportion of global sales at CJ E&M and CJ CGV to 54 percent by 2020,” said CJ Group at the press conference. This figure represents a more than threefold increase over the 16 percent level achieved in 2015, reflecting CJ Group's willingness to advance Hallyu (Korean wave) into a global business area by creating long-term business results, rather than just regarding it as a temporary trend.
CJ group said that it would focus its capabilities on making K-culture into part of global mainstream culture through the “Strategy for Hallyu 4.0” aimed at permeating the everyday lives of people around the world. To do so, KCON is expected to be held more than 10 times a year from 2020, serving as a gateway for the industrialization of K-culture and the entrance of small and medium-sized companies into overseas markets, in an effort to attract around 400 thousand people who want to enjoy Hallyu and K-culture every year.
“CJ will play a pivotal role in more quickly bringing about the Hallyu 4.0 era when Korean lifestyle will permeate everyday lives of people around the world, not just a select few Hallyu fans,” said Kim Hyun-Jun, Vice President of CJ Corporation. “We will practice business patriotism (contributing to the national economy through business) and co-prosperity, the twin pillars of CJ Group’s management philosophy, by establishing glocalization (global+localization) strategies and a fusion business model of culture and industry, and contributing to the creation of added value in related industries.”
The upcoming era of Hallyu 4.0 is when K-lifestyles, including Korean cultural contents, make inroads into the everyday lives of people around the world and becomes part of mainstream culture enjoyed by the world, not just some Hallyu fans. According to industry experts, the era of Hallyu 1.0 started with dramas including Dae Jang Geum (A Jewel in the Palace), and Winter Sonata in the 1990s and early 2000s; the era of Hallyu 2.0 was led by K-pop; and the current era of Hallyu 3.0 has a broader scope that encompasses K-movies and K-beauty.
For the globalization of Hallyu, CJ E&M has entered into a partnership with many overseas companies in China and Southeast Asia, with a plan to increase the proportion of global sales to 40 percent in 2020 by producing localized contents. Indeed, the broadcast sector is seeing remarkable results in exporting the formats of both planned and developed contents, as well as individual contents. The Chinese version Grandfathers over Flowers was produced and broadcast by Dragon China TV in 2014 and, earlier this year, the format was sold to NBC in the US, while the US version would be broadcast in the second half of the year.
In the movie sector, K-culture is spreading through the strategy of One Source Multi Use that localizes the contents of Korean hit movies for each country. Miss Granny, which attracted 8.66 million viewers since it premiered all over Korea in 2014, was remade with a cast of local actors and actresses in foreign countries such as China in 2014, Vietnam in 2015 and Japan in 2016. When it comes to box office sales, the Chinese version fetched 370 million yuan (about 62.5 billion won), a record amount among movies produced jointly by Korean and China companies, and the Vietnamese version 4.85 million dollars (about 5.5 billion won), which made the movie the biggest hit in Vietnamese movie history. The Japanese version, which premiered this year, earned 380 million yen (about 4.1 billion won).
CJ CGV laid out its strategy of spreading Korean-style theater culture around the world. In Korea, movie theaters have evolved into 'cultureplexes (culture+complex),' which is a multi-cultural space where people can enjoy various cultural activities, including shopping, eating out, concerts and gallery events, rather than just watching movies. CJ CGV now plans to enter overseas markets of 12 countries by 2020 and achieve 65% of all sales in overseas markets by securing around 10,000 screens.
Since it first entered the Chinese market in 2006, CJ CGV has grown to become the world’s fifth largest movie theater company, with 2,679 screens in 347 theaters across seven countries, such as Korea, China, Vietnam, Indonesia, Myanmar and the US. Notably, CJ CGV signed a contract with Turkey’s Mars Cinema for acquiring Cine Maximum in April, meaning that the number of CJ CGV’s theaters abroad reached 218, surpassing that of CJ CGV’s theaters (129) in Korea some 10 years since after its first foray into overseas markets.
“In order for K-culture to become part of mainstream culture, keen competition is inevitable in the global market,” said a representative of CJ Group, stressing “As the US and China are aggressively increasing capital investment in the culture business, Korean culture companies require a positive environment and support to help them develop expertise and achieve global competitiveness.”