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¥10m+ Funding in 6 Months: Shen Long Mei Zi’s Challenges in a Dwindling Industry The group’s future may largely depend on the support from large platforms such as Baidu, NetEase, and iQiyi.

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admin 2018-02-10 Collect

Yesterday, Fengxiao Media, the company behind idol girl group Shenlong Meizi, announced the official conclusion of its Series Pre-A funding, the leading investor being Guangyi Venture Capital, closely followed by Pengpai Venture Capital. Prior to this round of funding, the company had also received an angel round funding from NetEase.

Shenlong Meizi was created in June of last year by Fengxiao Media, a company founded by the admin of the Li Yi Ba on Baidu Tieba (Baidu’s interpretation of internet forums). The founder, Ying San Jia Ge, attributes the company’s successful founding by NetEase to his 8-year tenure at NetEase Gaming. This time, the support from Guangyi is also largely due to his abundance of experience in managing and running internet promotion campaigns.

Aside from NetEase and Baidu’s support, it is very likely that Shenlong Meizi will also be buttressed by iQiyi. Public information shows that the lead investor Guangyi VC is a joint operation between Everbright Ltd and iQiyi’s Tianjin Qizhi, hinting at the possibility of official endorsement on iQiyi’s platform.

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Currently, the group has 12 official members and 5 trainees. They debuted in July of 2017 with their performance of ChinaJoy’s theme song “Xiao Ci Yuan” (“Little Dimensions”). In 2018, Shen Long Mei Zi established a strategic partnership with NetEase’s Holokit Innovation Lab, announcing the AR-fication of the group’s content, all while commercially endorsing video games including Onmyoji and Knives Out. Just this month, its self-titled album reached over 8 million streams just in 3 days across all platforms.

However, aside from Shen Long Mei Zi’s success, the general market for idol girl groups has been less than ideal. Towards the end of last year, Huanju Shidai’s ¥500m RMB investment—1931 Girl Group—announced its plans to stop operations. Shortly after, another idol girl group ATF issued an apology regarding a mass refund due to the “uncertain future” of the group, with disbanding seemingly on the horizon.

Earlier this year, popular girl group Idol School was also exposed for not paying its staff members, some of which have even written to us to complain. Similarly, six artists under Z Cherry, including Zhou Qianwen and Cao Anna have also embarked on their journeys of requesting the salaries that were never paid to them. As an “idol management” company, since 2016, Z Cherry has introduced various girl groups such as Anyway, SSIDOL, CH2 and Cherry Girls.

2016 marked the beginning of the development of girl group economy in China, but the “shuffling” throughout 2017 has been slowly chipping away at investors’ confidence. Huanju’s exit from the market further proves the point that money doesn’t guarantee success in this industry, and even the traditional “top dog” Studio 48 has been firing on all cylinders to shift its “products and services” towards mainstream entertainment.

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Ying San Jia Ge also expressed his concern: traditional idol groups mostly focus on building dedicated venues, planning original performances, and recruiting as well as training a high number of members, all of which are very money-dependent. On the other hand, fans usually only have the choice to show support for their favorite idols by purchasing merchandise and records, often multiple times if they deem necessary.

Shen Long Mei Zi took a different approach: the group originated from an online platform (Baidu Tieba) and most of its operations are also done online, cleverly circumventing the cost of traditional idol groups and alleviating the financial pressure on fans as well.

To Shen Long Mei Zi, its fans’ active online participation is the focal point of the group’s day-to-day operation as the most active users can often boost the activity and “trendiness.” Combined with abundant digital promotion, the group can very soon prove its concrete value as a legitimate business. In fact, the founder has told us that if everything goes to plan, the group can turn its profits into the positives as early as mid-2018.

However, it’s still to be seen whether or not the group can break the idol industry “bottleneck.” We have analyzed in a previous article “¥500m Squandered as 1931 Shuts Down: The Uncertain Future of Idols” in this extremely fragmented market where platforms such as Douyin, Kuaishou, and Momo are “mass-producing” internet celebrities, essentially taking business away from the more traditional entertainers, it is even harder today to maintain long-term relevance as an idol.

From its humble beginnings on an online platform to a somewhat exaggerated rise of fame, then to a discouraging market environment for investors, there seems to be little room left for Shen Long Mei Zi. The group’s future may largely depend on the support from large platforms such as Baidu, NetEase, and iQiyi.  And while the founder cleverly saved a fortune by operating mainly online early on, to capture a larger audience, the group will have to inevitably extend its efforts to offline markets. What that will mean for the group still remains unanswered, and us here at CMBN will continue to provide you with updates on the story.

Translated by Kane Ge

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