Reports say a steep decrease in group purchases by Chinese fans is to blame.
In an industry that thrives on robust international sales, particularly from the lucrative Chinese market, K-Pop has hit an unexpected downturn. The recent plummet in album sales within China, which has nearly halved, is sending shockwaves through South Korea’s entertainment sector, as reflected in the decreasing stock prices of the country’s leading entertainment companies.
On November 17, an unusually stark decline was observed — with JYP Entertainment experiencing a significant one-day drop of 9.52%, closing at ₩90,300 KRW (about $69.70 USD), its largest dip in the past year.
The trend of falling stock prices was widespread among major entertainment houses, with YG Entertainment, HYBE, and SM Entertainment seeing drops of 9.01%, 7.40%, and 5.43%, respectively.
This downturn is attributed to institutional investors withdrawing en masse from the market, as evidenced by the net sale of entertainment stocks totaling tens of billions of won. Foreign investors also participated in the sell-off, with HYBE and JYP Entertainment facing substantial sales from it in particular.
Despite positive third-quarter earnings, investor confidence waned as the anticipated album sales from major idol group comebacks fell short.
Aespa‘s 4th mini album, under SM Entertainment, Drama, garnered sales of 530,000 copies on its first day, a stark contrast to the 1.37 million copies sold on the first day of their previous mini album.
Similarly, Stray Kids, managed by JYP Entertainment, sold 2.39 million copies of their 3rd full album last June, but their latest mini album, ROCK-STAR, only reached first-day sales of 1.88 million copies.
These disappointing figures are partly due to the marked decrease in group purchases by Chinese fans, a cornerstone of K-Pop album sales. Daol Investment & Securities reports a steep decline in album exports to China, with major entertainment companies only exporting about $28 million worth of albums from January to October this year, a significant drop from the $48 million reported in the same period last year.
The K-Pop industry, which has long been buoyed by its international appeal and cross-border cultural impact, is now facing a challenging phase in one of its key markets. This downturn in Chinese consumption may compel South Korean entertainment companies to reassess their market strategies and explore new avenues for revenue to mitigate the impact of fluctuating international markets on their financial stability and artist promotion strategies.
Author: from www.koreaboo.com