Bertelsmann bets on China's growth

German firm believes media market will become world's second-largest after US

In China, Thomas Rabe, chief executive officer of German media giant Bertelsmann SE & Co KGaA, prefers to be called by his Chinese name Han Tao, which he says makes him feel more localized.

An international media industry exposition in Haikou, Hainan province. A survey shows that the output value of China's media industry reached 637.9 billion yuan ($102 billion) in 2011, up 15.2 percent over the previous year. [Photo/China Daily]

In addition to this scholarly Chinese name, which means "great waves", Rabe's business card is also printed in two languages, with one side in English and the other side in Chinese.

Those very small details reflect the special importance the CEO of Europe's largest media conglomerate by sales attaches to the Chinese market. He predicts that China will soon become the world's second-largest media market after the United States.

Growing in China

Rabe's commitment to growth in China was reinforced in October when more than 100 of Bertelsmann's top executives, including the entire executive board and group management committee, gathered in Beijing for the company's first management meeting outside Germany

"As the second-largest economy in the world, China is a very attractive market for us," Rabe said.

The CEO said Bertelsmann sees China as one of the most important growth regions and will play a key role in its global expansion plans, particularly at a time when it sees slowing growth in Europe and the US, where the company reaps the vast majority of its revenue.

According to a market survey jointly released by the School of Journalism and Communication at Tsinghua University and the Social Sciences Academic Press in May, the output value of China's media industry had reached 637.9 billion yuan ($102 billion) in 2011, up 15.2 percent over the previous year. Of this, 42 percent was contributed by Internet-related business.

The survey also predicted that China's media industry will continue to boom and is expected to become a pillar of the country's economy in the next five years, with more capital flowing into it.

"The eurozone debt crisis has clearly had an impact on the macroeconomic environment, which led to a direct impact on Bertelsmann's business," he said.

"To fuel growth, we are looking to expand business in regions of sustainable high growth. China is the most important growth region for Bertelsmann to go forward."

To highlight China's key role in Bertelsmann's strategic shift from the West to the East, the group plans to increase its presence in China to consolidate its media empire, which will in return help Bertelsmann to reshape into a faster growing, more international and digitally leading company over the next five to 10 years.

China is not a new playground for Bertelsmann.