Can China's Nightlife Business Bounce Back After Shutdown?

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With the club world at a standstill due to the COVID19Pandemic, insiders predict many venues could close for good

When the first SPACE nightclub opened in Chengdu, in Sichuan province, in 2015, it was unlike anything else in China at the time. “People had never seen a club like that,” says Leon Chen Zhao, program director of YES! FM 96.3 Chengdu. Massive clubs dedicated to dance music — and dancing — had not existed before then in China. SPACE was “2,500 people together, 60-foot ceilings, LED screens everywhere.

Although China lumps bars, clubs and all other nightlife or live-music venues into one statistic, the rate of growth from 2010 through 2018 was still staggering. In 2010 there were 28,200 such establishments across the country, and by 2018 the number had more than doubled, to 64,500, according to Zhiyan Consulting, a research firm based in Beijing. During that same time period, the dance-club industry alone mushroomed from $1.4 billion to $7.2 billion .

Ironically, just as China was catching EDM fever around 2015, Las Vegas clubs were starting to struggle to be profitable, as fees for the top echelon of global DJs continued an inexorable rise and hotel operators opened more dance clubs, says Matthew Minichino, corporate vp nightlife and daylife at Hard Rock International. “The market became completely oversaturated,” he says.

Jacky Qing, founder/CEO of Club Galame in Foshan, a city of 7.2 million people just west of Guangzhou, declines to divulge the booking fees his operation paid for top-shelf DJs, but he does confirm that the club operated at a loss on those nights when it booked marquee names. Despite that, however, Qing says Club Galame — a 25,000-square-foot space with a 2,000-person capacity — was successful and the economics were attractive. In 2019, he says profits were around $422,000 a month .

On Douyin, users watching a live performance can give “Dou Bi,” a virtual currency available for purchase to show their approval. Those credits can then be redeemed for cash by the club or the performer. Sets are held from the DJ’s house in most cases, and a club’s social media reach draws significant audiences.

 

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