Havas Group said it is teaming up with a big Chinese ad agency company to launch a joint venture to benefit their clients and help local brands expand internationally.
Havas' partner in the deal is Guangdong Advertising Group Co., often called GIMC, which has about 4,500 employees and over 110 agencies that work across the spectrum of advertising. Their joint venture, called Havas GIMC Advertising Co., has starting capital of 30 million yuan, or nearly $4.4 million. France-based Havas Group will hold 51% of the integrated creative and media joint venture, which will open in Shanghai at first, with offices coming later in Beijing and Guangzhou.
The deal is a "win-win for both parties," said Andrew Kefford, Results International's regional managing partner for Asia Pacific, the Middle East and North Africa. He said it's "good for Havas' existing global clients, and I assume GIMC will have many larger domestic clients which have aspirations outside the mainland."
It's also a sign of how China's market is evolving, Mr. Kefford added. Domestic agency groups are getting more prominent internationally; China's BlueFocus bought London-based We Are Social and Canada's Vision7, and China's Leo Digital Network has evolved into a local powerhouse with major international clients.
GIMC was founded in 1979 in the southeastern city of Guangzhou, near Hong Kong; its clients include automakers Dongfeng Nissan and GAC Group, as well telecoms players China Mobile and China Telecom and appliance company Midea.
Havas Group, the No. 7 agency company by 2015 revenue, according to Ad Age's Datacenter, said the joint venture would benefit its clients in China, especially media clients, because they can "take advantage of the GIMC's massive buying clout and scale that bring incremental value." GIMC's clients may get the most benefit from Havas' creative offering.
China has huge brands that have struggled to build name recognition outside their home market. The Havas Group said the joint venture "will also be strategic for Chinese companies seeking to extend their presence in overseas markets and strengthen their competitiveness internationally." The Havas Group has over 2,400 employees in Asia-Pacific, with about 850 of those in China. Its China clients include LG, Emirates, Mighty, Hermes, Swarovski, Peugeot and Citroen.