SM and Tencent Music Launch Beijing Joint Venture STE
SM Entertainment and Tencent Music Entertainment have formed a Beijing joint venture called STE, appointing Super Junior-M's Zhoumi as CEO to develop
SM Entertainment and Tencent Music Entertainment Group have established a new joint venture company in Beijing named STE. The venture, announced on August 27, will focus on developing and managing artists for the Greater China market and is preparing a new Chinese idol group for debut within two to three years.
Zhoumi, a member of Super Junior's China-based unit Super Junior-M for nearly 20 years, has been appointed CEO of the joint venture. SM states that Zhoumi combines an understanding of the K-pop production system with management experience gained as a Director at the company's Chinese subsidiary.
Venture Structure and Initial Plans
STE will run auditions to cast the new Chinese idol group and will handle its management inside China following its debut. According to SM, the venture will also take over exclusive Greater China management for three existing SM artists: NCT DREAM's Renjun, and WayV's Yangyang and Xiaojun. The company says STE will provide more sophisticated localized promotions and support for these artists' activities.
The joint venture follows a memorandum of understanding signed by SM and TME in May 2025. In that same month, TME became SM's second-largest shareholder by acquiring HYBE's entire 9.38% stake for KRW 243.35 billion (approximately $177 million at the time). South Korean tech group Kakao and its subsidiary Kakao Entertainment remain the largest shareholder with a combined 40.28% stake.
Leadership and Strategic Vision
In a statement, CEO Zhoumi expressed his commitment to the role. "I am delighted to serve as the representative of this joint venture, which was born from the solid trust and strategic vision between SM and TME," he said. Zhoumi added that he aims to combine SM's strengths in IP and content production with the unique characteristics of the Greater China market to showcase differentiated content.
This venture aligns with a localized IP strategy outlined by SM Co-CEO Dmitry YJ Tak earlier in the year. "In China, we are working with Tencent Music Entertainment; in Thailand, with True; and in Japan, we are currently in discussions with multiple partners," Tak said in January, emphasizing a focus on creating locally resonant IP while maintaining SM's creative identity.
TME's Broader Investment Strategy
STE represents the latest in a series of TME investments in South Korean music companies. The following table outlines recent key moves by Tencent Music Entertainment:
| Date | Investment / Venture | Focus / Details |
|---|---|---|
| February 2025 | Joint venture ONECEAD (with JYP CHINA & CJ ENM) | Artist development and management in Greater China. |
| May 2025 | Co-led an $80 million Series B round in The Black Label | Valued The Black Label at approximately $660 million. |
| May 2025 | Acquired a 9.38% stake in SM Entertainment | Became SM's second-largest shareholder. |
Market Context and Challenges
The move into China comes as the market's significance grows. According to the IFPI, China overtook Germany to become the world's fourth-largest recorded music market in 2025, growing 20.1% year-on-year. South Korea ranked seventh in the same report.
However, K-pop acts have reportedly faced an unofficial bar from performing in China since around 2016/2017, following South Korea's deployment of a U.S. missile defense system. TME is China's largest operator of music streaming services, running QQ Music, Kugou Music, Kuwo Music, and the karaoke platform WeSing.
