Haier taps WE for premium brand

And other news in Greater China

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QINGDAO--Haier Group will launch its first premium appliance brand this summer in a bid to create a more upscale global image. The new line will debut in China but the Qingdao-based white goods giant plans to roll it out overseas eventually.

The name of the brand has not been announced, but the company has appointed WE Worldwide Partners in Shanghai to handle strategy and creative for the new line following a pitch against Grey Global Group, according to WE’s Hong Kong-based chairman-CEO, Viveca Chan. Like many Chinese companies, Haier works with a variety of agency partners, local and multinational, rather than appointing one longterm agency of record. Dentsu, Draft/FCB and Saatchi & Saatchi, for example, all work with Haier on various projects.

Many executives at Haier's agencies complain that the company’s bureacratic operating style and lack of a strong marketing department have hindered its growth. The company has ambitious plans, and already has a manufacturing base and large retail presence in the U.S., where it is viewed as a budget brand by American consumers as well as by many middle class Chinese. Haier hopes launching a premium line under a new brand with high-end products aimed at upscale consumers will transform its global image.That strategy has worked for Japanese and Korean companies like Sony Corp. and Samsung Electronics.

“The company realizes it’s difficult for them to market Haier as a premium brand, since they entered the U.S. with low-priced products. Locals in China also have a fixed idea about the Haier brand,” said Ms. Chan. She worked with the Haier team leading the premium brand’s development several years ago when Grey Global Group won an unrelated project. At that time, she was Grey’s CEO for Greater China.

Strong adspend growth will continue in the run-up to the Olympics
HONG KONG--Advertising expenditure in China is accelerating in the run-up to next year's Olympic Games in Beijing, with above-average growth still forecast after the games in 2009, according to a forecast by ZenithOptimedia.

In 2007, overall year-on-year growth is predicted to remain broadly similar to 2006, when adspend rose by 16.5% compared to 2005. Adspend this year should reach $14 billion, based on ZenithOptimedia estimates. But in 2008, the increase in spending will accelerate above 22.6%, to $17.2 billion.

That's faster than growth in China's gross domestic product, estimated to be 10.5% for 2006. The Olympics will also help China overtake France to become the world’s fifth-largest ad market by next year. Among all types of media, spending on television will show most impressive growth in 2008 with a year-on-year change of at least 26.5%, fuelled by two factors.

"Firstly, dominant broadcaster China Central Television (CCTV) claims to be sourcing Olympic coverage provincially to 60 channels. Secondly, the government has stated its aim for digital TV to have a penetration of 15 million households by 2008. Experience from the World Cup in 2006 has shown an increasing number of viewers accessing not just editorial but streamlined video footage through portals and this area should provide increasing opportunities for ad revenue across the Olympics," said Matt Semple, ZenithOptimedia's regional development director for Asia/Pacific in Hong Kong.

Another area showing impressive growth is outdoor, he added. "With huge demand and limited supply, contractors have been seeking for advertisers to commit to three-year contracts [starting in] 2006, to secure prime sites in Beijing, fuelling increased investment."

Shanghai Media Group partners with Nielsen
SHANGHAI--The Shanghai Media Group (SMG), one of China’s most innovative media and entertainment organizations, is partnering with The Nielsen Company to measure the growth of outdoor media and the internet in China. Nielsen will provide insights into consumer behaviour across all media and entertainment options, setting the value of commercial time and space, and conducting media campaigns and developing innovative media promotion methods.

“The media development in China has been unprecedented and China has quickly found its place among other international markets in terms of the application of various new media,” said Nielsen’s CEO, David Calhoun in New York.

SMG will leverage its media and content development experience in China, where “the fast development of new media technology has presented challenges to conventional broadcast media,” said Shanghai-based Li Ruigang, president of SMG.

The company started out as Shanghai’s provincial TV broadcaster and now operates two satellite channels, four terrestrial channels and seven cable channels, reading 95% of TV households in Shanghai and tens of millions more Chinese through syndication on cable platforms around the country. By expanding into radio, print, new media, sports marketing and performing arts, SMG has become one of China's most powerful entertainment companies.

GM's sales rise 25% during first quarter
SHANGHAI--General Motors Corp. and its joint ventures in China sold 291,588 vehicles in the first three months of 2007, a 25% year-on-year increase. In March, sales reached 100,538 vehicles, only the second time the company has ever broken the 100,000-unit mark for monthly sales in China.

First-quarter sales at Shanghai GM, the U.S. auto giant's joint venture with Shanghai Automotive Industry Corp., rose 26.5% from a year earlier to 113,768 vehicles. The sales growth drove GM’s first-quarter market share in China, the world’s fastest-growing car market, to an estimated 13.9%, an increase of 0.5% on an annual basis.

“Coming off a record year in 2006, China’s vehicle market has remained remarkably strong thus far in 2007. The key once again is demand for passenger cars, which has showed no signs of slowing,” said Shanghai-based Kevin Wale, GM’s group president and managing director, China in a statement.

At the Auto Shanghai 2007 show later this month, GM will introduce the latest version of Chevrolet Volt architecture, GM's extended-range electric passenger vehicle. The first version of the car was unveiled at the North American International Auto Show in Detroit in January 2007. It will also display a new Buick model at the show, hinting at possible future directions for the brand worldwide.

“That GM would choose Shanghai as the location to introduce the next iteration of the Volt is a reflection of how GM is contributing to the industry’s long-term sustainable development by sharing its latest achievements and technologies with its friends and partners in China,” said Mr. Wale.

NatGeo launches "Advernture" and "Wild" in Hong Kong
HONG KONG--National Geographic Channels International (NGCI) hopes to attract younger viewers with more energetic and experiential programming on a new channel, Nat Geo Adventure, launching May 1 in more than 40 countries including Hong Kong.

The channel will air in other Asian countries, such as Singapore, Indonesia, Thailand, the Philippines and Australia. Programming will target young travelers who crave edgy content, like the rush of surfing a 20-foot wave, said David Haslingden, NGCI’s CEO in Washington, D.C.

On April 1, NGCI launched another channel in Hong Kong, National Geographic Wild, programmed with documentaries about the animal kingdom. The company has two other channels in Hong Kong, National Geographic Channel and A1, an outdoor adventure channel.

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