Fox spirits and demons: China’s tech giants splash out in cartoon arms race

    HANGZHOU, China (Reuters) – Rising up within the Chinese language port metropolis of Dalian within the 1990s, Zhang Hongchang spent hours immersed in Japanese cartoons like Dragon Ball and Naruto.

    Individuals stroll previous a sales space of NetEase Comics on the China Worldwide Cartoon and Sport (CCG) Expo in Shanghai, China July 6, 2017. REUTERS/Stringer

    China’s home-grown cartoons paled compared to the Japanese anime sequence on tv and in comedian books that captured the imaginations of Zhang and his technology.

    Right this moment, Zhang is one in all China’s hottest cartoonists and on the forefront of a brand new wave of Chinese language animation that’s being pushed by the nation’s expertise and web giants. His newest hit comedian – which stars a highschool pupil who can be a Taoist priest with secret tremendous powers – has been seen 160 million instances on-line.

    China’s tech companies are engaged in a cartoon arms race to develop or purchase Chinese language characters in an animation market anticipated to hit 216 billion yuan ($33.22 billion) by 2020, in line with the EntGroup consultancy, attempting to emulate the success of Walt Disney Co’s (DIS.N) ensemble, which ranges from Mickey Mouse to Iron Man.

    A key to that effort, has been the event of artists like Zhang.

    “After I began, I used to be copying Japanese cartoons, however slowly I acquired my very own fashion,” Zhang mentioned within the Hangzhou studio the place he attracts comics which can be made accessible to readers on a platform operated by the native gaming agency NetEase Inc (NTES.O).

    “I had to spend so much time getting to grasp the Chinese language market and what Chinese language comedian readers needed.”

    Chinese language tech giants like Tencent Holdings (0700.HK), Baidu Inc (BIDU.O) and NetEase try to determine the identical factor.

    A part of the profitable formulation has been the usage of conventional Chinese language non secular and cultural themes, and characters. That, and improved high quality when it comes to artwork and storytelling, helped China’s comedian and animation market attain 150 billion yuan final yr, in line with EntGroup’s estimates.

    China nonetheless lags behind the Japanese and American markets, however is catching up. Japan is the highest producer of animation, whereas the USA dominates when it comes to gross sales, taking a virtually 40 % share of the worldwide trade, estimated at $220 billion in 2016, in line with a report from Analysis & Markets. China had round eight % that yr.

    For Chinese language firms, the event of compelling sequence and characters might additionally open up new enterprise alternatives that firms like Disney have exploited, like branded theme parks, video games, motion pictures, TV reveals, lunch packing containers and garments.

    “To make it work there should be good tales, good manufacturing, and content material that may resonate with shoppers,” mentioned Xu Zhiwei, animation and comedian copyright senior supervisor at Tencent in Beijing.

    Tencent is already seeing some success that would assist the agency preserve fast development and a excessive valuation.

    The gaming-to-social media firm purchased up “Fox Spirit Matchmaker”, which depicts romances between people and demons, when it was a little-known comedian, created by an artist known as Xiao Xin.

    The comedian has been developed into an animation sequence that’s been seen greater than three billion instances, Tencent advised Reuters, making it one of many hottest hits on its video platform, which has over 60 million paying subscribers.

    Tushan Susu, the animation’s most important character, has been featured in a industrial for the quick meals chain KFC (YUM.N) (YUMC.N). Tencent is now seeking to create a tv sequence and a online game utilizing Fox Spirit characters.


    China’s tech giants play an outsized function in Chinese language leisure. Tencent, the search firm Baidu, and Alibaba, the e-commerce large, management many of the high on-line platforms from motion pictures to sport, and are dominant in social media and on-line gaming.

    These companies wish to latch on to a surging sub-culture being pushed by a younger technology with a style for animation, known as “dongman” in Chinese language. This group is eager for extra local-style heroes, in line with trade executives.

    They’re additionally wealthier than their dad and mom had been, and have cash to spend.

    “Kids, particularly the post-2000s, are very keen to spend cash,” Geng Danhao, senior vp at Baidu’s on-line streaming platform, iQiyi, mentioned at an occasion in Beijing.

    Zhang Tuo, a 21-year-old faculty pupil in Sichuan, mentioned he had spent greater than 7,000 yuan on comic-related merchandise, from plastic collectible figurines to t-shirts. His favorites are native comics like Spiritpact and Monster Record. Tao Jie, 20 a pupil within the southwestern metropolis of Chengdu, mentioned Chinese language cartoons had improved when it comes to story traces and animation approach. Using native tales was additionally an attraction, he mentioned.

    “Numerous the Chinese language comedian and animation are developed from on-line novels that I’ve already learn. I like them as a result of I’m already a fan of the tales,” mentioned Tao.

    That shift has been helped by supportive authorities insurance policies to make sure that peak-time tv slots are stored for home animation.

    The massive tech companies are beginning to spend, although not but on the degree of Disney, which purchased Pixar Animation Studios for $7.6 billion, in addition to Marvel Leisure, and the Star Wars producer Lucasfilm Ltd for round $four billion every.

    Tencent has invested in additional than a dozen comedian and animation firms since final yr, in line with public data, whereas its movie arm launched a “100 animations” mission to help home productions.

    Baidu’s iQiyi (IQ.O), can be forking out on home comics, planning to spend 200 million yuan to signal Chinese language artists and develop native characters, which comes on high of an earlier funding in 10 animation initiatives, the corporate mentioned in Could.

    Alibaba and the information aggregator Toutiao have snapped up manufacturing firms and launched animation platforms on their very own websites. NetEase signed a deal final yr with Disney to create Marvel fashion superheroes, however with Chinese language traits.

    Luo Qiandan, advertising director of NetEase Comics, mentioned the agency was utilizing huge information from its platform to investigate what comedian shoppers needed and would feed this again to artists.

    It was additionally adopting different parts akin to Chinese language brush portray strategies and non secular themes.

    “Everyone is attempting to make use of Chinese language parts and Chinese language fashion,” she mentioned.

    Reporting by Pei Li in BEIJING, Adam Jourdan in SHANGHAI and Anita Li in HANGZHOU; Enhancing by Philip McClellan

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