Ni Hao Bollywood

Legend has it that Raj Kapoor once landed unannounced at the Moscow airport and fans gathered as soon as they got wind of the news. Such was the euphoria around the Indian actor that when he got into a cab outside the airport, his fans picked up the car on their shoulders. His film Awara—released as Brodiaga, or the Vagabond in Russian—was a runaway success at home and abroad, and sold more than 60 million tickets in the erstwhile Soviet Union. The success was followed by films like Rishi Kapoor’s Bobby, Hema Malini’s Seeta Aur Geeta, and Mithun Chakraborty’s Disco Dancer.

The love for Indian cinema in Russia and neighbouring countries might have come down over the years but Indian films are now conquering newer territories. In 2016, Aamir Khan managed to recreate similar euphoria in China, not completely akin to Raj Kapoor’s, but euphoria nonetheless. His film Dangal — the story of a wrestler who trains his daughters to international sporting success under adverse social circumstances—reportedly made more than ₹1,200 crore in China.

It was a feat unheard of for Indian films anywhere in the world. Indian films are usually released on a limited number of screens in the U.S. or the U.K., which collectively make up more than 5 million of the Indian diaspora, according to government data. China, with only about 55,000, hasn’t traditionally been a market for Indian films, but Dangal changed that. The film was released across thousands of screens and became the highest grossing non-Hollywood/non-Chinese film in the local market.

So does that mean that China, with more than five times the number of screens than India and a growing fan base for Indian films, is the new playground for Bollywood? Or is the success of films like Dangal, Secret Superstar, and Bajrangi Bhaijaan just a flash in the pan? One thing is certain: South Asians aren’t the only ones watching these films anymore. The performance of some of Aamir Khan’s recent films was “fuelled by local Chinese viewers as against South Asian diaspora. The Chinese, though coming from a different culture, have been able to identify with the core themes of these movies”, says a report, ‘Economic Contribution of the Film and Television Industry in India’, 2017, by Deloitte and the Motion Picture Distributors Association.

Kumar Ahuja, president of business development at Eros International, which has produced films that have done well in China, says Bollywood films with women-oriented subjects have been more successful in China. A large number of screens that take these films wider and to a larger audience has helped. In 2011, China had around 9,000 screens; now it has more than 50,000, and hundreds of them are in towns with a million-plus population, he explains. In comparison, the number of single-screen cinemas in India has fallen from 9,710, or 91% of total screens in India in 2009, to less than 71% in 2017 or 6,780 screens, according to a 2018 FICCI-EY report on India’s media and entertainment sector. At the same time, the number of multiplex screens has increased to nearly 3,000.

The success of foreign films is not novel. French, Italian, Japanese, Iranian, and many other language films enjoy massive patronage outside of their home countries. But the success of these films abroad is in part because of the following that directors like Italy’s Federico Fellini, Swedish director Ingmar Bergman, Japan’s Akira Kurosawa, Hong Kong-based director Wong Kar-Wai, or Iran’s Majid Majidi have around the world and the fact that they have paved the way for and created curiosity for new cinema from their countries. Not many Indian directors, apart from Satyajit Ray, are perhaps that well known globally.

Therefore, Indian films, known for their song-and-dance sequences, have largely been restricted globally to Indian audiences who understand the language and context, and are familiar with big names in Bollywood or regional cinema. But production houses are optimistic the perception is changing. “The audience is now familiar with Indian actors after many successful releases, which is helping to make way for Indian films in China. The year 2019 will see a maximum number of Bollywood films in Chinese cinemas, along with a lot of regional films soon entering this market,” says Eros’ Ahuja.

The success of films like Secret Superstar, 3 Idiots, and Bajrangi Bhaijaan has studio bosses excited. Avtar Panesar, vice president of international operations at Yash Raj Films (YRF), says Chinese audiences respond positively to “human stories” from India as Indians and the Chinese as people are very similar and face similar challenges in everyday life. “Any story that compels us to question ourselves or indeed evokes empathy for our fellow human beings will find a place in the hearts of the audiences,” he says. Rani Mukerji’s Hichki (2018) from YRF made more than ₹200 crore globally. Hollywood films are also a huge draw in China. But successful global movies in the country have traditionally been those anchored in a strong franchise, like superhero films from Marvel or Disney films with a strong cartoon character. Some films that have done exceptional business in China are heavy on special effects like Jurassic Park or Transformers .

Dinkar Ayilavarapu, a partner in Bain & Company, says movies strongly rooted in Indian culture have a relatively lower possibility of succeeding in an international market. “For instance, in the Arab world, Indian cinema and TV do well due to a cultural affinity. It is quite amazing to see that the two recent successes in China are Dangal and Secret Superstar, which don’t fit the franchise or special effects mould, which presumably makes them even more of an outlier,” he says.

Interestingly, the success has also led to collaborations between Indian production houses and distributors in China. Eros Now, the video-streaming platform of Eros Inter - national, has entered into a content-licensing agreement with Beijing-based online video platform iQiyi for its vast catalogue of Bollywood content that will be showcased on iQiyi. The partnership makes Eros Now the first South Asian video-streaming player to make inroads into the Chinese digital space.

YRF, India’s largest production house, is open to the idea of looking at films specifically for the Chinese market “if a story comes along that is compelling enough”. “We’re very proud to have a body of work that is extremely diverse by design and this would no doubt add immense value to that,” says Panesar. The fact that the Indian film industry is more organised and studios have become more prominent might actually help the industry in foreign markets. “There is more capital chasing movies which has resulted in higher quality output. And that higher quality will increasingly find success in other markets,” says Bain’s Ayilavarapu.

The success of Bollywood has also been linked to big stars like Shah Rukh Khan, Salman Khan, Aishwarya Rai, or the niche following for Rajinikanth in Japan, who have all enjoyed a certain amount of non-diaspora following. Robert Cain—a Los Angeles-based writer-producer, and president of Pacific Bridge Pictures, who has advised major Chinese firms such as China Film Group—says a big reason for the success of Indian films in China has been the immense popularity of Aamir Khan. “He was discovered by Chinese audiences when his film 3 Idiots was widely viewed there, mostly via pirated viewings,” he says. “The humour, heart, and traditional values (family, education, success through hard work, etc.) of his films have proven highly appealing to Chinese audiences.”

But films with these actors were not raking in the kind of money Indian films are making in China. “None of these were massive numbers in relation to domestic [business]. It was always a subset but now we see a phenomenon where from one single overseas market the top line box office exceeds and exceeds by far what a movie would in India,” says Jehil Thakkar, partner at Deloitte India. There are also many Indian films that haven’t been able to recreate the success of films like Dangal. “It’s not like they [Chinese audience] are waiting with bated breath for the opening of Bollywood films,” says Thakkar. However, if we look at a film like 102 Not Out, which did business worth roughly ₹25 crore in China, it is still a big number for a film which was made on a small budget.

The success of Indian films is impressive because China has a quota of only 34 nonMandarin films that can be released in the country. The quota is tweaked depending on how the local film industry is doing, which means that Bollywood will have to fight Hollywood and others for the limited spots. “The Chinese government will continue to monitor the number of imports into the country. There is a certain quota of the number of movies that can be imported,” says Thakkar. “I think the Indian film industry will have a limited set of movies that it will be able to exhibit in China.”

Some film pundits expect tensions in U.S.- China trade relations to affect the number of Hollywood films released in China. But they might be overestimating the impact of the trade row. “In the grand scheme of the U.S.-China trade tensions, films are probably a very small component. The trade tensions are not about cinema at all,” says Ayilavarapu. “Also, Bollywood is not a direct substitute for Hollywood.”

The story was originally published in Fortune India’s special collector’s edition - Business of Entertainment.