Dianjiang, a small county tucked away in southwestern China’s Chongqing, was transformed into a bustling live music hub in April as fans flocked to a concert headlined by Mandopop stars, including Jeff Chang.

Such scenes are no longer unusual. Once the preserve of megacities like Beijing, Shanghai and Guangzhou, high-profile concerts are now breathing life into lesser-known venues.

As China endeavours to make consumption its main growth driver and targets untapped markets, entertainment spending...