Most Western audiences might be unfamiliar with Xiao Zhan, the nationally beloved Chinese singer and breakout star of popular martial arts drama The Untamed. But in Southeast Asia, Zhan has amassed a large and dedicated fan base: the Xiao Fei Xia (XFX), translated as “Peter Pans.”

In the Philippines, fans can connect over the XFX Philippines group on Facebook, which has 20,000 members. In Indonesia, XFX fans can buy a red T-shirt emblazoned with the words “Xiaofeixia Indonesia” from e-commerce site Tokopedia. In Thailand, where Zhan’s fantasy drama Duoluo Continent is wildly popular, a video clip of a Thai papaya salad vendor went viral. It showed the vendor explaining to Chinese tourists in Mandarin that she had learned the language from watching the star on TV. 

Xiao Zhan’s fame in Southeast Asia reflects the rising popularity of Chinese dramas and streaming services within the region, where revenues from video streaming are projected to reach $1.32 billion in 2023. U.S. streaming platforms currently dominate the Southeast Asian market, buoyed by their expansive content budgets, wide selection, and Hollywood’s enduring prestige. Netflix leads viewership in Singapore, Indonesia, Thailand, the Philippines, and Malaysia, accounting for 42% of premium video-viewing time across Southeast Asia. Disney+ is the region’s fastest-growing platform, having added 9.4 million new subscribers in the first quarter of 2023. 

But the scene shifted in 2019, when Chinese streaming platforms like Baidu’s iQiyi and Tencent’s WeTV entered Southeast Asia. They have since been vying for a share of the market, offering cheaper subscription fees, acquiring local competitors, and boosting the production of content that appeals to local audiences. 

China’s state-backed Global Times has described Southeast Asia as the “core market” for Chinese dramas. “We’re already growing fast, with Thailand, Malaysia, Indonesia, and Singapore as our highest-growing markets,” said senior iQiyi executive Yang Xianghua in 2021. In Thailand, the race is already tightening: Netflix has 24% of the streaming market, while WeTV has 22%.  

Crucial to the growing appeal of Chinese platforms is the fact that they offer significantly lower prices than U.S. streaming services. In Indonesia, for instance, 40% of streaming subscribers come from lower- to middle-class income brackets, making affordability an important factor to win over consumers. Among all the foreign streaming platforms in the country, iQiyi boasts the lowest fees, starting at just 67 cents a month; Netflix’s cheapest subscription costs $4.42. Its high prices have impacted the streaming giant’s subscriber base: In the first quarter of 2022, Netflix added 20% fewer new users in the Asia-Pacific compared to the year before. 

To increase their brand recognition in Southeast Asian markets, Chinese firms are also acquiring competitors and building local partnerships across the region. In 2020, social media giant Tencent acquired Malaysian streaming company Iflix. The same year, iQiyi launched a partnership with Malaysian broadcaster Astro, which allows Astro to host iQiyi’s content on its streaming platform. It also hired a former Singaporean diplomat to lead its expansion into Southeast Asia. The moves have already paid dividends: In 2021, iQiyi became Malaysia’s most-downloaded streaming app.

Chinese streaming services have also ramped up production of local-language content — especially short-form web series, beloved for their high-quality plots packaged into easily digestible formats. In 2022, WeTV released over 40 local productions in Southeast Asia, tailored to local tastes. These included the popular Indonesian show My Lecturer My Husband, about a young woman thrust into an arranged marriage with a university lecturer; and The Wife, a Thai drama series about a woman who must navigate the challenges posed by her wealthy, unfaithful husband and his mistresses. This localization strategy has proved popular with Southeast Asian audiences — in the first quarter of 2023, 46% of users streamed local shows.

Chinese streaming platforms may also have an advantage over their American counterparts in the face of increasing government censorship. For U.S. companies, who must reconcile values of free speech and expression with economic interests, censorship directives from governments pose further challenges. Netflix has “pledged” not to “censor specific artists or voices” in the U.S., but has also said it will abide by local laws in foreign countries, “even when we disagree with them.” Between 2016 and 2021, the platform blocked at least 10 titles in Southeast Asia. It also removed scenes depicting China’s nine-dash line — which demarcates Beijing’s claim over parts of the South China Sea — from the Australian political thriller Pine Gap, following complaints from the Philippines that the scenes violated its sovereignty. 

On the other hand, Netflix also faces backlash for complying with censorship requests. Activists and human rights groups denounced the platform when it took down an episode of American comedian Hasan Minhaj’s show Patriot Act in Saudi Arabia — the episode had been critical of the Saudi crown prince’s alleged role in the killing of journalist Jamal Khashoggi in 2018. 

Chinese streaming platforms do not face the same scrutiny, given that they already comply with government censorship requests in their home country. Seen in this light, their growing influence across Southeast Asia could have alarming implications for creative expression in the region. In 2022, the Chinese government had asked iQiyi and Tencent Video to remove scenes featuring a lesbian character in the sitcom Friends. These practices are easily transferable to Southeast Asia. Last September, iQiyi temporarily blocked access in Singapore to several TV shows — already banned in China — that depicted same-sex relationships, in compliance with domestic laws. 

Though U.S. streaming services still lead the market in Southeast Asia, the aggressive expansion strategies of Chinese companies could prompt the status quo to change. China’s internet juggernaut Tencent has explored the possibility of acquiring iQiyi — a potential merger of China’s two streaming giants and their combined audience base would no doubt post a challenge to the dominance of Netflix and other American platforms in the region, even more than it already does. Fierce competition for video-streaming audiences is likely to intensify in the years to come.