In China these days, especially in the commercial world, culture is a word often used together with industry. To many entrepreneurs, culture industry stands for a promising new business.
Numerous mainland tycoons have already poured money into culture-related businesses, including movie making, theaters, performances, tourism and other forms of entertainment.
A piano maker is jumping on the bandwagon too.
Guangzhou Pearl River Piano Group (002678.CN) is reportedly raising 1.33 billion yuan (US$202 million) in private placement to boost its capital as it plans to make a strong push into culture industry.
Pearl River has big ambition. It will use part of the funds to set up an incubator program to groom 300-500 startups in a wide array of creative industries, including movies, animation and advertising, according to a China Securities Daily report.
The piano maker also wants to build several music education centers that offer lessons in instruments, dancing and other art forms. The facilities will be equipped with gyms and eateries as well to double as leisure hubs.
E-commerce is also on the drawing board. Apart from upgrading its logistics and warehouse operations, Pearl River will build a platform to sell pianos online, backed by physical showrooms — the so-called O2O (offline to online) model.
Part of the money will go to fund the acquisition of a controlling stake in German piano maker Schimmel.
Overall, Pearl River wants to transform itself from being a manufacturer into an integrated business platform that stretches far beyond the original focus.
It is a bold project and quite sensible too. If it pulls off the plan, Pearl River will become a stronger company with higher level piano-making technology. It will also make the most out of his customers, who may buy its pianos as well as take lessons at its music centers.
However, there are still some issues that must be sorted out. Pearl River is yet to prove it can acquire the German technology and mate it with cheaper mainland production without sacrificing quality.
Moreover, one should bear in mind that manufacturing is quite different from service. Meanwhile, it is also unclear if pianos are something that people would want to buy online.
Let’s hope that Pearl River won’t be too aggressive and put too much on its plate in one go.
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