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Petroleum industry

AirMedia Group Inc. and Sinopec Corp. Launch Exclusive Concession Rights Contract

Strategic Insights

— 2 min read

China's emerging consumer market is poised to undergo significant changes as AirMedia Group Inc. and Sinopec Corp. partner to create a vast outdoor advertising network. The exclusive concession rights contract will see AirMedia develop and operate advertising platforms at Sinopec's service stations throughout China, targeting the country's rapidly growing population of automobile drivers and owners. This strategic move extends AirMedia's leadership in the Chinese air travel advertising sector to the advertising market, aligning with the country's affluent consumer class. As the partnership unfolds, AirMedia plans to install advertising mediums in over 11,000 service stations across China by the end of the contract period.

Key Takeaways:

  • AirMedia Group Inc. (NASDAQ:AMCN) has entered into an exclusive concession rights contract with China Petroleum & Chemical Corporation ("Sinopec Corp.") (HKEX: 386; NYSE: SNP; LSE: SNP; CH: 600028) to develop and operate outdoor advertising platforms at Sinopec's service stations in China.
  • The contract, which became effective immediately, will expire on December 31, 2014, with AirMedia incurring concession fees to Sinopec beginning in the third quarter of 2009.
  • The partnership aims to target the country's rapidly growing population of automobile drivers and owners, who are considered among the most affluent members of China's emerging consumer class.
  • As of 2008, there were 122 million drivers and 64.7 million cars for civil use in China, with 41.7 million privately owned.
  • AirMedia plans to install advertising mediums such as scrolling light boxes in at least 3,500 service stations in provincial capitals and other developed cities by the end of 2011, and in at least 8,000 service stations during the contract period.
  • Herman Guo, chairman and chief executive officer of AirMedia, stated that the company is excited to partner with Sinopec to extend its media reach to China's rapidly growing population of automobile drivers and owners.
  • Mr. Guo emphasized that the partnership creates synergies with AirMedia's current media platforms and customer base, allowing advertisers to reach a broader base of affluent consumers in China.

Statistics:

  • 122 million drivers in China as of 2008.
  • 64.7 million cars for civil use in China as of 2008.
  • 41.7 million privately owned cars in China as of 2008.
  • 3,500 service stations in provincial capitals and other developed cities planned to be equipped with advertising mediums by the end of 2011.
  • 8,000 service stations planned to be equipped with advertising mediums during the contract period.
  • 28,000 retail service stations operated by Sinopec nationwide.

Sources:

  • China Weekly News editors from staff and other reports. Copyright 2009, China Weekly News via VerticalNews.com.

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