Dentsu Aegis Network Buys Hot Chinese Agency With Focus on Mobile, Retail, WeChat

VeryStar's Clients Include KFC, Pizza Hut, Uniqlo

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Jane Lin-Baden, CEO Isobar China Group, left, and Milan Jiang, founder and CEO of VeryStar.
Jane Lin-Baden, CEO Isobar China Group, left, and Milan Jiang, founder and CEO of VeryStar. Credit: Dentsu Aegis Network

VeryStar has been one of the buzzed-about small independent agencies in China, with a specialty in online retail commerce and mobile capabilities, including for hot all-purpose app WeChat. On Wednesday, the Dentsu Aegis Network said it had acquired VeryStar, wrapping it into Isobar China.

The Shanghai-based agency, whose full name is Shanghai VeryStar Internet Science and Technology Co., has around 70 employees and was founded five years ago. Clients include KFC, Pizza Hut and Uniqlo. Post-acquisition, it will be known as VeryStar – Linked by Isobar. Financial terms were not disclosed.

China is the world's largest e-commerce market, and mobile payments are big there already. VeryStar is a certified mobile platform design agency for both WeChat and Alipay, the payment system affiliated with Alibaba Group. Those players are driving innovations in how people use smartphones, and how brands interact with consumers. WeChat, for example, is now way more than a messaging app – people use it for customer service requests, to book hospital appointments, buy airline tickets, pay gas bills, order takeout and donate to charities – and all that happened well before before Mark Zuckerberg got excited about the potential for chatbots to link brands and consumers on Facebook Messenger.

VeryStar's strengths include social customer relations management, building social fan bases and the "ability to ensure everything on social links not just with conversations, but with transactions in Alipay and WeChat pay," said Jean Lin, global CEO of Isobar. "That's not just online but also in stores," she noted, since many brick-and-mortar shops in China accept such payments.

"Bringing the online and offline worlds together -- and closing the gap between brand inspiration and mobile and social transactions -- is really an interesting space that will help many brands be successful," Ms. Lin said.

Milan Jiang, founder and CEO of VeryStar, will stay on, handling client development, business strategy and planning. She reports to Jane Lin-Baden, CEO of Isobar China Group. Chief Technology Officer Jianhao Chen will continue to work on research and development.

Dentsu Inc. of Japan has been an active M&A player, signing nine deals worth a total of $210 million in the first three months of the year, according to R3. Holding companies looking to buy digital agencies in China have had unlikely competition lately from Chinese conglomerates venturing far from their traditional businesses to seek opportunities in online advertising. They include Leo Group, traditionally a pump maker, as well as Nantong Metal Forging Group.

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