South Korean K-Pop company SM Entertainment is expanding its presence in Southeast Asia with plans to set up its headquarters in the region in Singapore where it is also looking to launch its retail business.
The plan was confirmed by the entertainment firm to CNBC on December 1.
SM Entertainment founder Lee Soo-man told The CNBC Conversation last month that the plan could see the creation of a new K-Pop group called NCT Singapore, although it is unclear if it could come to fruition.
Lee, who is about to get a feature documentary about his life, told the news outlet in November that SM Entertainment is recruiting and producing talent through the “Culture Technology” (or CT) system that he developed where potential singers and dancers go through four stages: casting, training, marketing/management and producing.
“SM’s [production method] has become a model for producing K-Pop, and SM’s CT will expand to become [the] CT of the world. The Future of Culture Technology is the fundamental vision [of] SM Entertainment. And now, I am building a new cultural ecosystem by evolving CT from a culture-making technology to a cultural ecosystem-making technology,” Lee said in a speech at Stanford University in May.
Lee is often credited for bringing K-Pop to the world’s stage. SM Entertainment, which he founded in 1995, is behind some of the biggest K-Pop acts like SUPER JUNIOR, Girls’ Generation, SHINee, EXO, Red Velvet, KANGTA, BoA, TVXQ!, NCT and aespa.
SM Entertainment did not disclose how much it plans to invest in its Singapore headquarters, but told CNBC that the office will also be “managing joint ventures in Indonesia, Vietnam and Thailand, as well as communicating with [its South Korea office] for other related ventures and plans.”
The firm is also “in the midst of hiring more local talents, which will hopefully increase the full-time staff count,” and is also “looking at hiring local undergraduates or fresh graduates for internships.”
The Singapore HQ will also see SM Entertainment launching its retail businesses including cafes, merchandise stores and pop-up exhibitions, CNBC reports.
It comes as the company continues to tap into potential revenue sources. The company’s revenue in the third quarter surged 65.4% year over year to 238.1 billion South Korea Won ($183 million), with net profit reaching 29.2 billion won.
SM Entertainment already has a presence in the Southeast Asian region. In Indonesia, the company’s branch has won brand endorsements such as Mie Sedaap and Sasa for Choi Siwon of K-pop boy band Super Junior, and Somethinc and Lemonilo for NCT Dream, according to CNBC.
Lee further told CNBC that SM Entertainment is planning to create new groups or subunits such as NCT Tokyo and NCT Saudi.
In August, the company announced that it is expanding in the Middle East with the signing of a memorandum of understanding (MOU) with the Ministry of Investment Saudi Arabia (MISA).
The plan includes the promotion of S-Pop (Saudi Pop) via the discovery and production of local artists and the launch of “a metaverse platform to share Korean and Saudi culture.”
News of the Singapore HQ launch comes amid reported tensions between the company’s shareholders and Lee. The founder could give up his role as chief producer at the end of the year after SM Entertainment cut ties with a private company that he fully owns.
Lee remains the largest single shareholder in SM Entertainment.
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