Could Chinese authorities be about restrict imports of the quintessential multiplex staple imported from the United States?
No, we are not talking about movies or Hollywood; the greatest American export success to Chinese cinemas does not come from California but from the fields in Nebraska.
Different Attitudes – Changing Habits
Nothing illustrates the difference between Chinese and American cinema goers more than the respective attitudes to 3D and popcorn. While American audiences are increasingly turning their back on 3D, their appetite for concessions appears undiminished, to the point of circuits like Marcus and Laemmle installing larger seats to accommodate the expanding backsides.
Meanwhile, the challenge for Chinese cinemas is how to get people to consume more concessions to match their seemingly insatiable appetite for 3D films and thus increase average revenue per cinema visit. But a change is already underway.
The importance of popcorn to the growing Chinese cinema sector was highlighted by the recent revelation by Dalian Wanda Group that nationwide popcorn sales for its Chinese cinemas totaled 390 million yuan (USD $62.8 million) last year. This amounted to 72% of total concession sales and 9.5% of its total earnings of 4.1 billion yuan. (By way of comparison Wanda’s American chain AMC earned USD $1,847 million from ticket sales and USD $787 million from food and beverage in 2013, with concessions thus representing over 28% of total revenue.)
The push to pop in China is understandable because the ingredients for a bucket of popcorn cost just 3 yuan (US$0.48) while selling for 20 to 30 yuan (USD $3.22-$4.83). Huang Qunfei, general manager of the Chinese exhibitor Beijing New Film Association, was quoted by Xinhua as saying, ”It is very common to have an 80-percent profit margin in selling popcorn due to its low costs. Although tickets sales make up the largest share of revenues, popcorn and snacks can sometimes contribute more to profits.”
Sales of popcorn accounted for as much as 20% of the total revenue of Chinese cinemas turnover in 2013. Wanda is the largest but not the only circuit benefitting from growing popcorn demand. Quoted in the Want China Times:
An executive at the Beijing UME Cineplex stated that popcorn and beverages were usually the only derivatives sold at domestic cinemas and that the complex’s popcorn sales accounted for 10% of its total revenue of at least 30 million yuan (US$4.8 million) last year.
However, the issue of concessions is complicated by the increasing tendency by Chinese cinemas to bundle cinema tickets, popcorn and sodas as one combo.