Posted on Wednesday, Mar 30th 2016
According to China’s State Administration of Press, Publication, Radio, Film and Television, the country’s box office revenues grew 48% last year to RMB40 billion (~US$6.2 billion). During the year, cinema goers increased by 48% as well to 1.14 billion. China is seeing a big push in online and mobile purchase of movie tickets. Reports suggest that in the first half of the year, nearly 70% of the movie ticket purchases were made online. Little wonder then that the industry is giving rise to members of the Billion Dollar Unicorn Club.
Beijing-based Beijing Weiying Technology was founded by David Lin and Lin Ning, its current CEO and an Internet and media entrepreneur. Lin Ning founded three other companies before setting up Beijing Weying Technology in 2014. Weying released its WePiao app in early 2014. The app received good traction and within eight months of its launch, it had sold 4 million tickets. The app has been based on the WeChat and the QQ platforms to enable ticket sales over these messaging apps. Besides the chat applications, WePiao is also accessible to users through its web portal.
Through its tie-ups, WePiao is able to sell tickets for more than 4,500 cinemas across 500 cities in China. The company has also expanded beyond movie tickets and has partnered with over 1,200 theaters, stadiums, and exhibition pavilions to sell tickets for these events. Besides purchasing tickets, the service allows users to purchase popcorn and select seats for chosen events.
WePiao earns revenues by charging a commission on tickets sold. Additionally, it is an advertising portal for movie companies and earns revenues for promoting movies. Its financial details are not known, but the company is estimated to own 8% market share in China.
WePiao is venture backed and has raised $340 million in financing through two rounds. In November last year, the company raised RMB 1.5 billion (~$235 million) from Beijing Cultural Assets Chinese Anci Films & Television Fund. Other investors in the company include CITICS Prosperity Fund, GGV Capital, Southern Capital, Gopher Asset of Noah Private Wealth Management, New Hope Group, Tencent Holdings Limited, and Dalian Wanda Group. At its last funding round, WePiao was valued at $1.6 billion. The valuation made WePiao the fastest growing Unicorn in China as it attained the status in less than two years of being founded. Prior to this round, WePiao had raised $105 million in a funding round in April 2015 at an undisclosed valuation.
In December last year, WePiao announced that it was merging with another Chinese online ticket booking giant Gewara. Gewara is estimated to own nearly 22% of China’s online ticket booking market. Together, the merged entity will own nearly 30% of the market, making it the second biggest player in the market after Meituan’s Maoyan, which held around 36% market share. The merger will help the two compete more effectively with Maoyan for the top spot in the market. The ticket booking market has attracted big names in the Chinese online space. Alibaba too has a piece of the market through Taobao’s online ticketing arm and Mtime, which account for 6% of the market’s share. Post the merger, WePiao’s parent Weiying will own both the ticketing platforms. Terms of the deal were not disclosed.
China has been a success story in getting consumers to buy entertainment tickets online. Analysts estimate that in 2015, only 13% of total movie tickets sold in the US were bought online. In China though, 63% of moviegoers were purchasing tickets online in 2015. Heavy traffic to these sites has been driven through price wars which has helped push movie ticket prices significantly lower than purchasing them in-person at the ticket counter. Such price wars are not necessarily healthy or sustainable for the cinemas and event producers.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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