Introduction:
Focus Media plans to acquire 100% equity of Chengdu Newwave Media Group Co., Ltd. from 50 stakeholders including Zhang Jixue, Chongqing JD Haijia E-Commerce Co., Ltd., and Baidu Online Network Technology (Beijing) Co., Ltd., through a combination of share issuance and cash payment. Together, Focus Media and Newwave Media hold over 80% of the market share, suggesting that the elevator media market may have entered an era of unification.
I. Focus Media’s Path of Expansion via Acquisition
Founded in 2003, Focus Media’s founder Jiang Nanchun entered the untapped elevator advertising market and pioneered the “urban living circle” media model. In 2005, Focus became the first Chinese advertising media company listed on Nasdaq and rapidly expanded through a series of acquisitions:
- In 2005, acquired Frame Media: integrated elevator poster resources, establishing industry leadership.
- In 2006, merged with Target Media: acquired its largest competitor for USD 325 million, raising its market share from 50% to 98%, nearly monopolizing the elevator TV ad market.
- Continued expansion: acquired cinema advertising companies and digital marketing firms, building a full-scenario advertising network covering office buildings, cinemas, and retail spaces.
With its “acquisition + integration” strategy, Focus Media has remained the industry leader. As of 2024, its market cap surpassed RMB 100 billion (approx. USD 13.8 billion), covering 300 cities and 3 million media terminals, reaching 400 million urban mainstream users. Jiang Nanchun once admitted, “Acquiring and merging is addictive.”
II. The End of the Rivalry: Focus Media Swallows Newwave Media
Though both are elevator media companies, Newwave and Focus took different routes—Focus concentrated on first- and second-tier cities, while Newwave focused on third- and fourth-tier cities; Focus targeted office buildings, while Newwave occupied residential buildings. Newwave’s founder Zhang Jixue once said: “Focus occupies office buildings, we’ll occupy the last 100 meters to the household.”
In 2018, Newwave’s screen installations exploded, doubling from 300,000 at the end of 2017 in just one quarter. This made Jiang Nanchun feel threatened. Focus Media also began a renewed push, increasing its installations from 1.515 million in 2017 to 2.167 million in Q1 2018.
Amid intense competition, Newwave Media formally “declared war” in 2018 with a letter titled Notice on Fully Poaching Focus Media’s 100-Million-Level Clients, stating: “We will offer the same effectiveness as Focus Media at half the price of their deals.”
The price war wore both companies down: Focus Media’s net profit plunged 67.8% year-on-year in 2019, while Newwave reported a loss of RMB 1.074 billion in 2018. Newwave suffered more severely, beginning to scale back operations by 2023 and still operating at a loss in the first three quarters of 2024. A Focus Media executive privately told reporters, “Both sides are exhausted. Profit margins are paper-thin from the price war. It’s better to sit down and talk.”
On April 9, 2025, Focus Media announced its intention to acquire 100% of Newwave Media for RMB 8.3 billion (approx. USD 1.14 billion), primarily via stock issuance (exact ratio TBD) with a small cash component. This marks Focus Media’s second major integration with a top competitor since merging with Target Media.
Key Deal Information:
- Valuation controversy: Newwave has raised over RMB 8 billion historically, and was valued at RMB 18 billion by Hurun in 2024, yet was acquired for only RMB 8.3 billion, sparking “fire sale” accusations. Founder Zhang Jixue explained that stock payment aligns with long-term interests—Focus Media’s future valuation growth could offset the discounted sale price.
- Target company status: Newwave incurred cumulative losses of over RMB 800 million between 2022 and 2024, but it owns 740,000 smart screens, covering 200 cities and 180 million residents. It specializes in third- and fourth-tier city residential scenarios, complementing Focus Media’s strength.
- Integration plan: Zhang Jixue will become Chief Growth Officer at Focus Media, responsible for digitalization and expansion in lower-tier cities. The combined screen network will grow by nearly 30%, improving overall coverage density and structure.
Why acquire now?
• Policy window: In 2024, the China Securities Regulatory Commission encouraged mergers and acquisitions—Focus seized the momentum for accelerated consolidation.
• Ending the price war: In 2018, Newwave’s “half-price customer poaching” strategy slashed Focus’s gross margins. Post-acquisition, internal competition ends and pricing power consolidates under Focus.
III. The Elevator Media Dispute Ends, and an Era of Market Unification Begins
- Market concentration rises—duopoly becomes a monopoly
Post-merger, Focus Media’s share in the outdoor advertising market will rise from 14.5% to 17.2%. The combined CR2 (Focus + Newwave) share in the elevator media segment exceeds 80%, forming an absolute dominance. The third-largest player, Tiying Media, holds less than 1% and poses no real threat. Regional small companies stand no chance. - Scale and synergy benefits
• Complementary placements: Focus dominates first- and second-tier office buildings; Newwave thrives in third- and fourth-tier residential communities. Together, they extend coverage from the “work circle” to the “life circle,” meeting advertisers’ full-domain reach needs.
• Cost optimization: Integration of sales teams and tech R&D will cut costs and improve efficiency. Shenwan Hongyuan estimates Newwave’s per-screen income could rise from RMB 2,700 to RMB 5,000, potentially delivering RMB 1.1 billion in annual profit. - Restructured competition logic
• End of price war: The prior battle for clients drove prices down. Post-merger, Focus’s bargaining power strengthens, and gross margins could rebound above 70%.
• Digital upgrade: Newwave’s smart screen tech, combined with Focus’s data analytics, will drive elevator media from “brand exposure” to “brand + performance synergy,” attracting more SMEs as clients. - Antitrust concerns
While the merged entity only holds 17.2% of the total outdoor advertising market, its dominance in the niche elevator media sector may trigger regulatory scrutiny. Focus Media has responded that the deal is still in the “proposal” stage and that it will cooperate fully with the Antimonopoly Bureau as required.
[Disclaimer]: The above content reflects analysis of publicly available information, expert insights, and BCC research. It does not constitute investment advice. BCC is not responsible for any losses resulting from reliance on the views expressed herein. Investors should exercise caution.