Chinese Whispers in London – Chinese brands in the UK

Charles de Gaulle once commented, “China is a big country, inhabited by many Chinese.” As astute as this observation was (and is), it was hoped that a trip that Zeitgeist paid to London’s Victoria and Albert Museum ten days ago, entitled ‘Going Global: Advertising Works UK China 2010’, might provide a little more insight. The Institute of Practitioners in Advertising described the morning as,

A conference in association with UKTI and linked to London Design Festival looking at the value of advertising and how the UK can act as a creative hub to Chinese brands seeking to go global.

Hosted by the IPA, the conference involved talks from a series from numerous luminaries from Ogilvy, BBH, McCann Erickson and JWT. Our emcee for the morning, IPA Director of Marketing Ms Janet Hull, noted that the UK was the fourth largest market in the world for ad expenditure. Ms Hull also talked about the increasing interaction between UK and China advertising; senior BBH and M&C Saatchi people have been on IPA visits throughout China over the past 18 months.

The great Rory Sutherland (whom Zeitgeist has mentioned in previous articles on behavioural economics and neuromarketing) was next up, speaking in an introductory manner to the morning’s proceedings, stressing that “value is subjective”, that it is created at the point of consumption. Added value exists mostly in the mind, he went on, not in the physical atrributes – “the atoms” of your product. He gave luxury brands as an example of this. He also pointed out that China currently has six brands in the top 100 (six years ago they only had one), according to WPP’s BrandZ survey (which Zeitgeist played a small part in helping develop). He foresees many more Chinese brands entering this pantheon in the next few years. One of those brands is China Mobile, and it was the Chief Representative of this company, Henry Ge, who would speak next.

Launched in 1995, China Mobile is now a $53bn brand. A recent survey conducted revealed 74% customer satisfaction with the brand, higher than any landline or mobile provider in the US. Curiously, not only do they have a very high loyalty rate, they also have a very high return rate, suggesting that perhaps of those who do leave, most will come back. Mr. Ge talked next about brand strategy, talking about how the company offered different plans (divided by pricing, services and rewards) in order to exploit customer segementation, while also seeking differentiation from competition and pricing for sustainable growth. Also of interest was to hear the development of the brand’s USP over the last ten years. In 2000, the brand’s selling point was coverage. In 2010, it’s platform, referring to Apple’s iPhone and Google’s Android OS, as well as more specifically mobile shops and apps. The future? Well, according to Mr. Ge, the future is all about experience, putting the consumer in control. Nothing new you might think; it will depend on how China Mobile and others execute this. It gels well with a recent article in the New York Times which stated “spending money for an experience… produces longer-lasting satisfaction than spending money on plain old stuff”. Of course, as a company comprised principally of engineers, Mr. Ge confessed that those at China Mobile would be understandably nervous about such a shift in power.

Orlando Hooper-Greenhill, Director of Global Planning at JWT spoke next on HSBC, aka Hong Kong Shanghai Banking Corporation, set up in 1865. Any regular traveller would be able to tell you of the bank’s perpetual presence on “jet bridges” – the bits linking the airport to the plane – the idea behind which, Orlando stated, was to say goodbye to you as you left one country, and for it to be the first thing that says hello in a new country. HSBC’s proposition rests on the suggestion that even though their offices are spread the world over, they still provide superior service through their local knowledge. This was exemplified when Orlando showed the room two TV ads for HSBC, one from the US and one from China. Zeitgeist has had a terrible time tracking down the Chinese ad, and at the time of publication Orlando hadn’t responded to our request for where we could get our hands on a copy to post here. Needless to say the ads demonstrated an insight into each audience that it was targeting more than simply laying its cards on the table as to what services the bank could provide. He also presented the audience with a fascinating graphic, which Zeitgeist did manage to track down, see below. It puts into context just what a large audience is waiting out there for your advertising messages (albeit an audience with some maturing to do still).

Next up was Li Fangwu, Assistant Secretary General of the China Advertising Association. He began by mentioning that it was in 1978 when the ad industry as we know it (or don’t) today was “restored”, presumably as part of the Beijing Spring, currently with 170,000 agencies and over a million employees, which is quite staggering. However, Mr. Fangwu was forthcoming as he showed that year-on-year advertising turnover had declined since 2005, which made Zeitgeist realise that China is not completely immune to the effects of a recession. Most amazing was the advertising law dating from 1994, currently under revision. The levels of bureaucracy involved in getting advertisements legally processed was stupefying. Hopefully the blurry pictures below of the numerous government bodies needed to rubber-stamp their approval of a campaign gives an impression of the dizzying complexity currently involved. The word ‘byzantine’ comes to mind.

Nick Blunden of Profero was up next, who spent part of the beginning of the conference polishing up his presentation sat on the row in front of Zeitgeist and a colleague. Mr. Blunden was full to the brim with interesting, topical statistics proving the oft-proved power of the Internet etc. One of the more interesting stats was that smartphone handsets will find their way into the hands of 250m pairs of hands this year, quite a figure. Among some of the more innovative and intriguing case studies he mentioned were Pepsi’s superb Refresh campaign, Lufthansa’s MySkyStatus and Diageo’s Windsor campaign in Korea. Last but certainly not least was Chris Macdonald, CEO of McCann Erickson did his best to convince Zeitgeist that he shouldn’t shoot off to the Cote d’Azur when the Olympics (and the unwashed masses in their millions) descend upon London in 2012. An informative talk all round, and surely but a taste of things to come as China’s sphere of influence grows.