Asian Expansion

South Korean talent agency and record label YG Entertainment, which represents superstar rapper Psy  has announced plans to expand into China.

YG will set up a company on the mainland sometime this year, according to the South China Morning Post.

Chief operating officer Simon Choi Sung-jun told the newspaper that Psy’s worldwide success has prompted the company to “put more resources and invest more into the greater China market, which we believe will be the next big market after Japan.”
In addition to Psy’s hit “Gangnam Style” being the third-biggest selling single in the world last year, another YG act, boy band Big Bang, played to more than 800,000 people on its most recent world tour.

As a result, YG saw a 36 percent rise in year-on-year revenue in 2012. 
Net income rose rose 45 percent to 18.76 billion won ($16.9 million). Up until last year, YG’s main overseas market was Japan, but through shrewd social media marketing the company has quickly expanded the audience for its artists, especially in China.

“We are going to open up a new dedicated entity in mainland china within the year by collaborating with local partners,” said Choi, adding that the office would be in either Beijing or Shanghai.

He pointed out that it’s difficult to generate income from downloads on the mainland, so the new company will concentrate on concerts and events, and collaborate with fashion brands and other businesses.

YG isn’t the only Korean company looking to expand to China.

SM Entertainment has already started launching groups on the mainland with Chinese names and members. Music exports to China from Korea rose from $1.8 million in 2008 to $3.6 million in 2010.