Clear business models hard to establish in traditional martial arts

2017-05-10 10:09Global Times Editor: Li Yan ECNS App Download

Clear business models hard to establish due to lack of uniform standards in traditional martial arts

On April 28, a video emerged showing 37-year-old former mixed martial arts (MMA) fighter Xu Xiaodong knocking out self-proclaimed tai chi master Wei Lei in about 20 seconds. The video quickly went viral on Sina Weibo. Later, Xu proclaimed that he had exposed what he called "fake martial artists." The video has drawn attention to the state of traditional Chinese martial arts. The Beijing News reported on Friday that Shaolin Temple, the famous birthplace of one of China's martial arts, has broadened its business interests beyond teaching martial arts into martial arts performances, tourism and medicine. Other traditional Chinese martial arts have tried to follow its example, but have had less success. Given the early stage of the development of traditional Chinese martial arts, industry experts said that there are no clear business models for martial arts at present.

China may be home to one of the most famous names in martial arts, but the people behind the country's traditional martial arts have had trouble turning their disciplines into profitable businesses.

Among China's traditional martial art schools, Shaolin Temple has had the most success in developing its brand of kung fu into a profitable business. The temple, nested on Songshan Mountain in Central China's Henan Province, is involved in an array of businesses such as martial arts education and performances.

Although there are at least 13,968 companies in China with the word "Shaolin" in their names, Shaolin Temple has only invested in four of them, with an accumulated investment of 8.51 million yuan ($1.23 million), The Beijing News reported on Friday.

Of the four companies, Shaolin Temple Culture Communication (Dengfeng) Co, with registered capital of 1 million yuan, develops and operates films, TV programs, theatrical performances and video games, the report said.

Another company, Shaolin Yaoju Co, sells medicine, according to Shaolin Temple's website.

The temple's core platform is Shaolin Intangible Assets Management Co. Established in 1988, the company focuses on protecting Shaolin Temple's brand and trademarks.

In 2014, the company's deputy general manager Yuan Mingzhu said that the temple has registered more than 200 trademarks in dozens of countries and regions, The Beijing News reported. In total, Shaolin Temple owns 475 trademarks and its brand is its primary source of income.

Other styles of Chinese martial arts, such as Emei and Wudang, haven't fared as well. Experts said it is hard to turn them into businesses because the forms lack uniform standards.

The first Emei school opened when Wang Jian, former president of the China Emei Kung Fu Research Association, set up Leshan Giant Buddha Martial Arts School in 1993, the Beijing News report said. The school has since become the largest martial arts school in Southwest China's Sichuan Province.

In 2008, Wang established Emei Martial Arts Culture Communication Co, which hosts martial arts performances and sells crafts, among other businesses.

In 2012, Wang told news media that the combined cost of the school and the company was about 6 million yuan a year and the total profit was 2 million yuan in 2011.

In July 2016, the local regulator accused the company of "abnormal operation" for failing to release its 2015 financial report on time, according to The Beijing News.

Wudang is less involved in business.

"-Wudang has -developed slowly over the years, mainly due to systematic problems and the Taoist belief in avoiding fame or fortune," Zhong Yunlong, the former abbot of Purple Heaven Palace, the main Taoist temple at Wudan Mountain, once said in an interview, according to The Beijing News.

No clear business model

It's too early to make a business out of traditional Chinese martial arts, considering their diversity, said Zhang Jiayuan, partner at Beijing-based Ransenhuizhi Investment Fund Management Co.

"Thanks to government incentives, investment in the country's sports industry has grown in recent years, though its scale remains below international levels," Zhang said. "In addition, given that the martial arts industry remains in an early stage of development, no clear, concrete business model has emerged."

The traditional model for a martial arts business is to open schools and charge students to learn the discipline, The Beijing News reported.

However, these schools don't have a large profit margin, said an employee of Xu's Battle Club, a school started by former mixed martial arts (MMA) fighter Xu Xiaodong.

"These schools have to pay for rent, instructors and utilities, while their only income comes from charging for classes," the employee told The Beijing News.

Schools for other martial arts have come up with other ways to make money. Taekwondo schools charge for classes, uniforms and level tests, according to The Beijing News. They also accept a wide range of students and have a diverse group of practitioners.

Given that there are no uniform standards among China's various martial arts, it is hard to form standard competition principles like the ones established in taekwondo, Zhang said.

Although many MMA fighters can earn tens of thousands or even hundreds of thousands of yuan from each fight, they have to share the income with their agents and teams, The Beijing News said, citing an industry expert. In addition, most match hosts still lose money due to the limited audience.

However, in the process of exploring business models for Chinese traditional martial arts, a new model that integrates martial arts and tourism and culture has been gaining attention.

For example, Wu Xianfeng, director of the management committee of the Wudang Mountain special zone in Central China's Hubei Province, said the zone will step up efforts to boost tourism by integrating Taoist culture, Wudang martial arts, healthcare and the Internet, the domestic news portal reported on April 28.

Sports tourism is the fastest--growing segment of the global tourism industry, the China Sports Daily reported on Monday, citing World Tourism Organization. China has great potential, given that the country's sports tourism market represents around 5 percent of the domestic market, compared with 20 percent in foreign countries, it noted.


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