"It's a much more fashionable brand among young Chinese" than Coke, says Abel Wu, marketing director of LiNing, China's leading sportswear company.
While Pepsi-Cola courts young consumers all over the world, Richard Lee is proving particularly adept at captivating Chinese teens. Since he joined Pepsi as brand manager for China in 1997, market share has doubled to 22%, bringing it roughly level with Coca-Cola.
"In the beginning, we had low awareness and Pepsi was a no-name brand," says Mr. Lee, 40, who looks as hip as his target consumers in trendy jeans. "We didn't come where we are now overnight; it happened in stages," using the brand platform "Dare for more," which means both "breakthrough aspiration" and "infinite thirst quencher" in Chinese.
Mr. Lee, now VP-marketing for PepsiCo's beverages in China, has adapted Pepsi's global marketing tactics by integrating the Pepsi brand into China's music and sports culture. Early on, he signed up Hong Kong singer/actor Aaron Kwok as a brand spokesman, sponsored China's National Soccer League, and ventured into grassroots programs like training camps and concerts.
These days, PepsiCo is going even further to integrate its flagship brand into the hearts of young consumers, such as by sponsoring popular bands like F4. It also produces record albums, stages concerts and even develops feature films. "Today, Pepsi is a 3D experience shared through nontraditional media vehicles," says Mr. Lee.
Even in its mainstream marketing, Pepsi has led Coke in innovation. Pepsi's latest TV spots, created by BBDO Worldwide here, are a stunning mixture of Chinese martial arts and sci-fi special effects. Mr. Lee, who was a budding filmmaker as a teenager in Hong Kong, also turned the two-part TV campaign into a music video that aired on music channels like News Corp.'s Channel [V]. And last summer, he installed the world's largest billboard in Chongqing for PepsiCo's Gatorade.
"Richard has applied a mix of traditional advertising with many other tactics, including sex appeal, buzz and PR," says Harjot Singh, strategic planning director for China at BBDO.
Mr. Lee also knows how to apply symbolism. When Pepsi sponsored the Hong Kong International Film Festival, known as the "Oscars of China," he "negotiated for the event's red carpet to be changed to Pepsi's shade of blue, which attracted a lot of attention," Mr. Singh says.
Now, Mr. Lee has to sustain the brand's appeal in the face of more skillful competition, namely the arrival of Ilan Sobel, Coca-Cola Co.'s new Shanghai-based general manager-strategic marketing and innovation.