Declining K-pop album sales in China are dealing a serious blow to SM Entertainment and other Korean agencies that rely heavily on Chinese fandom. 
Album sales from China have been declining since June. Sales from aespa and Red Velvet, especially, began nose-diving from early October, potentially due to direct and indirect restrictions from the Chinese government. K-pop agencies’ shares have been falling since the middle of that month.
China has long been home to an incredibly loyal K-pop fan base whose members are known for bulk-purchasing albums to support their favorite idols.

Export volume of audio-related products, including the physical CDs for K-pop albums, fell 95 percent to $156,000 from May to June, according to Korea Customs Service data, and hit a low point of $96,000 in August.
Shares of SM Entertainment, which dominates markets in China and Southeast Asia, plunged 19.42 percent to 100,800 won ($77.68) between Oct. 5 and Oct. 31. The price has struggled to recover and closed at just 90,400 won on Tuesday.
A Kyobo Securities report released last month lowered SM Entertainment’s target stock price by 19.4 percent to 145,000 won, maintaining a conservative outlook due to China’s falling album sales.
Shares of YG Entertainment, JYP Entertainment and HYBE fell 8.96, 7.9 and 1.35 percent, respectively, during the same period.
China’s influence in the K-pop industry, as a whole, has been on the decline. 
“It explains why the first-week CD sales from aespa and Stray Kids, who made comebacks in November, have been relatively disappointing,” said Shinhan Securities analyst Ji In-hye. “Albeit unclear, the reasons behind the drop in China’s sales may include the slowdown in local economic conditions, rising emphasis on patriotic consumption and an increase in black market sales that are not reflected in the Korea Customs Service’s official data.

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aespa 에스파 ‘Drama’ MV
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[STATION] aespa 에스파 ‘Dreams Come True’ MV
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