Japan's No. 1 agency has set its sights on becoming a force in all of the continent with the start-up of agencies in China, Singapore and Malaysia. The new shops expand a Dentsu roster that already includes Thailand, Taiwan and Australia. And the agency said it's eyeing additional ventures in Vietnam and the Philippines.
Further development of Dentsu's network in Europe and the U.S. isn't on the agenda.
"Right now, we're not planning any significant new investments in either region," said Koichi Segawa, director of Dentsu's overseas management division here. "Our emphasis is going to be on winning business from Japanese clients" marketing in Asia.
Dentsu had gross income of $1.4 billion in 1993, ranking fourth among the world's top 50 advertising organizations. But only $20.9 million, or less than 2%, of that came from the U.S., according to Advertising Age's annual agency income report. Dentsu doesn't break out gross income for Europe.
Dentsu had $10.8 billion in billings, and the Tokyo office led all others with $9.8 billion. All European operations generated just $259 million and U.S. offices only $71 million last year.
Dentsu executives said the shift isn't a de-emphasis of Europe and the U.S. as much as it is a response to clients' newfound interest in Asia.
That's one goal of the venture in China, where Dentsu is teaming with state-run China International Advertising Corp., which already bills $11.5 million, and privately owned Da Cheng Advertising, with $1.2 million in billings, to form Beijing Dentsu Advertising Co.
Dentsu is providing 51% of the initial capital of the new agency, which will have offices in Beijing and Shanghai.
Beijing Dentsu has one client, personal products marketer Kao Corp., one of the agency's top five clients in Japan. The new office is projected to bill $10 million in its first year; Dentsu expects billings to grow 15% to 20% annually.
Dentsu earlier this month announced two other majority-owned joint venture agencies, one in Singapore and the other in Kuala Lumpur, Malaysia, called Dentsu Mandate Singapore and Dentsu Mandate (Malaysia) Sdn. Bhd. Both are joint efforts with Singapore-based Mandate Advertising International.
Dentsu owns 65% of the new Singapore agency; in turn, the Singapore joint venture owns 90% of the Malaysian venture. The remaining 10% is owned by Mandate Saga. Mandate Saga itself is a joint venture between Mandate and a semigovernmental Malaysian conglomerate, Perrus Sdn. Bhd.
Dentsu won't forecast billings for the Singapore and Malaysian joint ventures. But Mandate's Singapore agency already works for two Japanese clients, Kikkoman, a soy sauce maker, and the Sogo Department Store. Canon, a Dentsu client in Japan, is in line as a client for both new offices.
Dentsu's expanded Asian network closely matches that of its Dentsu, Young & Rubicam Partnerships venture, which has agencies in Japan, South Korea, China, Hong Kong, Taiwan, Philippines, Singapore, Malaysia, Thailand and India. But the growth of Dentsu's own network isn't a sign of weakening support for the joint venture, Mr. Segawa said.
Dentsu's attention to growth in Asia mirrors the interest of its clients.
"Many Japanese companies first looked to Asia as a base for lower cost manufacturing than was possible in Japan for products they sold in Western markets. But increasingly, they are marketing directly to consumers throughout Asia," driven by consumers' rising incomes, Mr. Segawa said.