CJ E&M targets the Vietnamese and Thai markets of 5 trillion won
CJ E&M strives to strengthen its entry into the global market given the saturation of the domestic market.
Vietnam and Thailand, representing the new foundation of CJ E&M enabling it to grow as a global top 10 culture company by 2020
The total contents company, CJ E&M (CEO Kim Sung-Soo), announced that it will establish CJ Blue Corp in Vietnam by acquiring Blue Group (Chairman Le Thi Tuy Nga), a leading contents production and advertising agency in Vietnam.
CJ E&M signed an MOU in April, and currently plans to launch True CJ Creations, a partnership for media business, with True Visions (Chairperson Soopakij Chearavanont), the largest total media provider in Thailand, to spur its entry into the Southeast Asian market.
CJ E&M had set a goal of becoming a global top 10 culture company by 2020 by diversifying its contents business in Southeast Asia, choosing Vietnam and Thailand as a beachhead for entry into the Southeast Asian market.
Acquiring Blue Group of Vietnam and launching a partnership with True Visions of Thailand are significant moves that could lay the foundation for CJ E&M to enter the global market given the present saturation of the Korean market.
In addition, such global business based on Korean human resources and IP is also likely to spur the global expansion of Hallyu, or the Korean wave.
Vietnam: Acquisition of Blue Group, top 3 contents production/advertising agency in Vietnam with annual sales of 80 billion won
CJ E&M acquired Blue Group, a top 3 contents production/advertising agency in Vietnam with annual sales amounting to the equivalence of 80 billion won, and intends to leverage this development towards active penetration into the Vietnamese contents market. The company aims to become a major contents company in Vietnam by combining its knowhow on contents planning and production and Blue Group's expertise in the local contents market.
CJ E&M became the first foreign company to acquire a local media company in Vietnam. CJ Blue Corp is expected to double its sales in the next five years by strengthening local partnerships.
To this end, CJ Blue Corp plans to ▲ release remakes based on its existing IPs in drama and entertainment, ▲ produce localized entertainment and drama contents through participation of Korean staff, and ▲ and invest in infrastructure such as studios in order to improve the overall quality of contents.
CJ Blue Corp is also seeking to increase advertising sales by combining CJ E&M's knowhow about advertising planning and effect analysis and Blue Group's sales capabilities.
Vietnam is understood to have high growth potential; it is a "young" country where the population aged less than 30 accounts for over 50% of its entire 90 million-strong population (KOTRA, 2015) and this young demographic tends to exhibit keen interest in cultural business and has a high preference for Hallyu contents.
In addition, Vietnam is one of the most rapidly growing countries in the world, posting a GDP growth of 6% in 2015, 6.2% in 2016 and a projected 6.5% in 2017 (World Bank, 2015). It also possesses many similarities to South Korea in terms of sensibility with an open mind for foreign cultures, and these characteristics will work favorably to ensure the company's business success in Vietnam.
Thailand: Establishment of a partnership with True Visions, a digital terrestrial broadcasting operator and largest MSP in Vietnam
In Thailand, CJ E&M also signed an MOU for establishing a partnership and completed the establishment of a corporation, kicking off its plans for penetration into the local media market.
CJ E&M established True CJ Creations, a partnership for media business in Thailand with True Visions, a subsidiary of True Corporation, a communications and broadcasting affiliate of CP Group (Charoen Pokphand Group), the largest private company in Thailand with annual sales of the equivalent of 60 trillion won.
True Visions is a digital terrestrial broadcasting operator and Thailand's largest and only MSP that provides coverage of the entire nation. CJ E&M plans to provide localized broadcast contents in Thailand by combining its knowhow about contents planning and production with the local media business infrastructure of True Visions.
In addition, through collaboration with various affiliates under CP Group, the company will expand its scope of business to advertising, digital, festival and artist management.
Currently, True CJ Creations is preparing to air programs based on CJ E&M's IP, including a Thai version of "Get It Beauty" a women's lifestyle show, and Korean television series "Hello Monster" in Thailand, aiming to provide three drama and entertainment contents by 2017 and over ten by 2021, including its own IP.
With the increase in the number of terrestrial broadcasting channels and the growing demand for high-quality contents, with contents users being highly receptive to Hallyu, the growth potential of True CJ Creations in Thailand is expected to be high.
According to a report published in 2016 by Korea Creative Content Agency, the Thai media market is anticipated to record a CAGR of 6.3% until 2019, forming a market of $4.253 billion. Thailand started terrestrial digital broadcasting in 2014 with six channels (CH 3, 5, 7, 8, 9, Thai PBS) and now features 24 channels and is expected to have 48 channels in the future.
In addition, according to [A Report on Hallyu in the World 2015] published by KOFICE, the awareness and experience rate for Hallyu contents in Thailand recorded as high as 90%, showing an overall positive awareness of Hallyu culture.
"To achieve our goal of becoming a global top 10 company by 2020, CJ E&M is implementing its 'glocalization (global + localization)' strategy to provide localized contents through collaboration with our key partners in each country," remarked CJ E&M CEO Kim Sung-Soo.
"By acquiring Blue Group in Vietnam and establishing a partnership in Thailand, CJ E&M has been able to successfully lay the foundation for our contents business in Vietnam and Thailand, and we are determined to solidify our position as Asia's No.1 contents company by spurring business expansion to other Southeast Asian countries."
CJ E&M is already moving closer to attaining major success by showing significant results in Vietnam and Thailand. The company's films [Em La Ba Noi Cua Anh] and [De Mai Tinh 2] became the most-viewed and the second-most-viewed films in Vietnamese cinema history, and the drama [Forever Young], which was produced in partnership with VTV, a Vietnamese state-run broadcaster, recorded the highest rating among programs in the same time slot.
In addition, the Thai version of the famous music audition program [I Can See Your Voice], retitled [I Can See Your Voice Thailand], which aired last January on Workpoint, a terrestrial channel, triggered a sensation by registering an average rating of 4% and a peak rating of 5.5%, fivefold higher than the average rating for the same time slot, and the Thai version of "Let Me In" also posted an average rating of 4.5% and is slated to launch its second season in November.