Explore the China licensing market trends. Learn how domestic brands like Ne Zha 2 are challenging global giants like Disney and Marvel and why Chinese consumer preferences demand cultural IPs.

In a remarkable display of national pride, China's animated film Ne Zha 2 has shattered global box office records, earning over RMB 12.4 billion (approximately $1.7 billion) in just a month. This unprecedented success is not just about entertainment—it signals a deep-rooted shift in Chinese consumer preferences, where domestic brands are gaining momentum over foreign ones. This evolution is key to understanding the China licensing market, a highly competitive but rewarding landscape for marketers looking to capitalize on branding and intellectual property (IP). 

Trends in China’s Entertainment Licensing Market: Consolidation and Inclusivity

The China licensing market is both vast and concentrated. Children in top-tier cities recognize an average of 328 different entertainment brands, an increase from previous years. While the market is fiercely competitive, the top five brands alone account for 25.7% of total brand mentions, indicating a high level of consolidation at the top for market leaders like LEGO.

At the same time, the market is becoming more inclusive. Over 68% of entertainment brands are recognized by both boys and girls, a figure that has been growing in recent years. This shift suggests that IP appealing to both genders have a higher chance of long-term success in the Chinese market.

According to Philippe Guinaudeau, CEO of BrandTrends, "The Chinese licensing market is evolving rapidly, driven by a mix of global influences and strong domestic brands. The ability to localize and embrace cultural narratives is now a key success factor for brands looking to establish a long-term presence in this dynamic landscape."

The Battle of Brands: Global Giants vs. Local IP Powerhouses in China

The Chinese licensing market presents a unique blend of international and local players. While global giants like LEGO, Disney, and Marvel dominate specific segments, homegrown brands such as Boonie Bears, Pleasant Goat and Big Big Wolf, and Honor of Kings remain strong competitors. This global vs. local brands in China dynamic is critical for strategic planning.

• International Brands excel in categories such as toys, superheroes, and Western storytelling.

• Local Powerhouses dominate animation (like Ne Zha 2) and gaming.

Classic Chinese mythology, such as Journey to the West, continues to hold deep cultural significance, especially among female audiences. This mix of global and local preferences creates both challenges and opportunities for new market entrants seeking strong Chinese IP.

Key Takeaway for Licensing Professionals 

The massive success of IPs rooted in Chinese culture, exemplified by the Ne Zha 2 box office records, proves that localization and authentic cultural storytelling are essential to capturing the modern Chinese consumer.