Small concerts are doing well because audiences are displaying a diverse taste for different kinds of music, according to veteran Shanghai music critic Sun Mengjin.

Only in recent years has China's music market started to diversify on a broad and more open scale into different categories. "In the past all you could hear was pop music. Now we have world music, folk ballads, jazz, country music and so on," Sun said. Different artists target different groups of audiences. "Young fans who follow Korean pop idols are not buying tickets to Hong Kong singer Allan Tan's shows and vice versa."

The popularity of live shows on satellite TV has helped to expose audiences to broader categories of music and cultivated a more diversified taste for music, Sun and Wang agreed.

The market is unavoidably becoming more and more divided and segmented, Sun said. Artists of each genre will take his or her slice of the pie. Sun is more than happy to see the phenomenon as evidence of a more colorful and enriched cultural life for people.

Only a few top notch entertainers - internationally famous and of great market appeal in China - are able to attract large number of audiences to fill an open stadium with more than 10,000 people.

"A few years ago, the artists that were well received in the Chinese market tended to be slightly outdated in the West," Wu, from Shining On Culture, said, adding that now the Chinese market is ready for more contemporary acts - Maroon 5 and Jason Mraz both did very well in Shanghai.

"Faye Wong can even have eight consecutive concerts at a large hall such as the Mercedes-Benz Arena but there is only one Faye in China," said Sun, the music critic. "Large hall performances can put lots of pressure on the artist."

It may cost 50,000 yuan less to rent for one night a medium-size venue such as Shanghai International Gymnasium with 4,000 seats than a larger indoor stadium that can hold up to 9,000 people.

"It takes deep understanding of the market to decide how many tickets are likely to be sold for each artist's show," Wu said.

The concert organizer may want to try a larger venue in the hope of selling more tickets but if the box office sales don't turn out satisfactorily, it will significantly affect the artist's marketing value and reputation in the long run.

"It looks pathetic if one sings to a half-empty hall," Wu said. If this happens, "he or she may not be able to tour in China again".

Usually a concert contractor can cover his costs when 60 percent of the tickets are sold, the rest being profit. Successful as small concerts are, they are not generating very high profits simply because they are small and there are only a few tickets for sale, Wu said.

Mercedes-Benz Arena has made extensive efforts to introduce Western artists to perform at its Mixing Room and Muse because it wants to develop a reputation as the best place to see shows.

The new complex on the eastern bank of Huangpu River opened as the Mercedes-Benz Arena after the World Expo 2010 in Shanghai. It also has a cinema, skating rink and restaurants in addition to the main show venue that has 18,000 seats and the Mixing Room.

"We have closely studied Weibo and WeChat in order to understand the market," said Enoch, who has decades of experience working in the music industry in the United States and who has been in China for eight months. "We want to bring foreign shows people don't usually get to see here," he told China Daily. "It's about educating the audience too."

Rather than doing business on a show-by-show basis, Enoch considers these small concerts as part of a puzzle that will come together to form a bigger picture. Money has not been the primary business goal - at least yet.

The Mixing Room and Muse is a joint venture between Mercedes-Benz Arena and Muse, a leading clubhouse company in Shanghai. Hennessy VSOP, the Cognac brand, is also a sponsor. These initiatives have helped to share the cost of shows and provide more fun for concert-goers, such as the holding of pre-show parties.