Letter From Shanghai

Oh, to Be a Millennial in China

Ad Age Editor Abbey Klaassen Reports From Shanghai

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Abbey Klaassen
Abbey Klaassen
To be a millennial in China is to never have known what a recession looks like. It's to have known only economic expansion and rapid, accelerating change. It's to have learned English in school and accessed the world via the internet. It's to celebrate national pride as your country hosts the Olympics and now a World Expo that has filled the hotels in Shanghai and saw 1 million visitors last Saturday.

As Shanghai-based Arto Hampartsoumian, Bartle Bogle Hegarty's CEO of China (Ad Age China's Agency of the Year in 2009), puts it: The only thing millennials here have known is positivity. This "'80s generation," as he calls it, has never had a bubble burst. In a word, it's about optimism.

And Stephen Drummond, a longtime student of Chinese culture and behavior and national planning director at Y&R in Shanghai, says the so-called Golden Generation, ages 18 to 35, represents significantly bigger change than the baby boomers brought on in the west.

That's the sentiment I'm hearing over and over again as I spend the first part of the week in Shanghai, meeting agency execs, marketers and general managers of the Chinese divisions of Fortune 500 companies. I have to admit, it's kind of refreshing, coming from my recession-addled part of the world.

The government is highly protective of this optimism, of course, as evidenced by the positive spin put on much of the news produced by the state-influenced media (at least as it relates to China, news about the U.S. is another story). And advertising promotes the sentiment. As the BBH folks in China point out, messages about having to persevere through tough times just don't resonate here. Rather, the success storyline in advertisements is about going from "happy to happier" or, as Ad Age China columnist P.T. Black told me, in line with the government philosophy of "social harmony."

Yesterday, Asia Editor Normandy Madden and I stopped by PepsiCo to visit with Richard Lee, the chief marketing officer for PepsiCo China. Mr. Lee, who has responsibilities for both snacks and beverages under him, left China three and a half years ago for a global marketing role based in New York and just returned this past summer to Shanghai.

He noticed two big changes between when he left and when he returned, he said. First, the pace of change had accelerated dramatically and it was happening across China. Places he'd previously known as farmland were now dotted with stores and restaurants. (And his own marketing team had grown from 30 or 40 people three years ago to more than 120 today.)

Secondly, the digital footprint has dramatically expanded into greater China and its third- and fourth-tier markets, sating a content-starved population and creating an emerging population that may not have access to indoor plumbing but knows Wayne Rooney.

China is a "convergence of great forces," Mr. Lee said. You've got an enormous country with a 2,000-year history going through a period of great economic expansion -- and at the same undergoing the digital revolution. That mix has created a non-linear evolution, more Big Bang than Charles Darwin. And the Chinese believe everything is possible.

Mr. Lee said that's allowing categories to develop more easily here because people lack the skepticism of the west. They're willing to try new things and take risks.

"We have to look at China differently," he said. "What is happening here from an economic, cultural, political and business standpoint is unprecedented. We have to look forward and take risks -- we can't adapt the same old model." Asked who has done that well, he points to the mobile phone industry in emerging markets, where companies such as China Mobile, MTN in Africa and Airtel in India have built new models to address those markets.

Indeed the biggest worry a multinational such as PepsiCo faces in China isn't its other deep-pocketed Western-based competitors but the emerging local brands that have higher tolerance for the risk required here and lack the baggage of business models developed in another part of the world.

That doesn't mean the U.S.'s influence is declining, but rather than economic it's increasingly cultural. And branding is something the U.S. has always done extremely well, Mr. Lee pointed out. From Las Vegas to Wall Street to Broadway, everything is a brand -- and the Chinese crave exposure to that and, thanks to the internet, are increasingly getting it. Unlike Japan, whose great economic boom came before the mass internet age, in China it's happening simultaneously.

"U.S. culture and influence will persist in China for a long time," Mr. Lee said.

Return to the Ad Age China home page here

ABOUT THE AUTHOR
Abbey Klaassen is the editor of Advertising Age.
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