Philips appeals to trendy home owners with lifestyle site

And other news in Greater China

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SHANGHAI--Philips Electronics has launched an online marketing platform in China to engage middle class consumers, many of whom are becoming home owners for the first time and are new to home decoration. Created in Shanghai by OgilvyOne, the below-the-line arm of Ogilvy & Mather, the Philips My Life site was designed to give its target audience the experience of using Philips products in a modern lifestyle environment.

“Philips is a long-standing brand in China with many product sites, corporate sites and campaign sites. Every web site has its own database and member program. The challenge is that every online campaign runs separately and most information is very product-driven,” said OgilvyOne creative director in Shanghai, Johan Vakidis.

With a primary focus on the benefits, rather than the products themselves, the lifestyle site advises consumers about how to put different products together using art images and a short interactive film about star products and how they can be implemented. While viewing the film online, users can click on the products, which range from mp3 players to toasters, any time for more information. Since the late December launch, the Philips My life site has averaged 1,105 visits per day, and about of 20% of visitors return.

DHL appoints Mediaedge:cia in China
HONG KONG--DHL has handed its $12 million media business in China to WPP Group’s Mediaedge:cia ( MEC), following a pitch against Publicis Groupe’s Zenith Media, Grey Global Group’s MediaCom and Aegis Group’s Carat. MEC already handles DHL in the rest of Asia and has worked with the delivery service in China in the past, but for the past year, DHL used a local broker instead. The decision was finalized just before DHL launched a regional brand campaign across Asia, including China, created by Ogilvy & Mather, Singapore. Ads will use the tagline “All the Way.”

Coke hands water business to WE in Hong Kong
HONG KONG--Coca-Cola Co. has appointed an independent agency, WE Marketing Group, to handle brand strategy and creative for Bonaqua mineralized water brand and Bonactive sports drink in Hong Kong. The win follows a three-way pitch against the incumbent, Ogilvy & Mather, and Publicis Worldwide.

Noodle giant Kangshifu appoints Y&R for new product line
SHANGHAI--The Taiwanese instant noodle giant Kangshifu Food has appointed Y&R, Shanghai to handle creative for a new instant noodle brand in China, following a four-way pitch against Publicis Worldwide, M&C Saatchi and Ideology Advertising Agency, an independent agency based in Taiwan. With a market share above 50%, Kangshifu is the leading seller of instant noodles in China, largely through sales of its popular Master Kong brand. It also markets water and fruit juice brands in China. KongShiFu’s main creative agencies in China are Tokyo-based Dentsu and the Japanese agency’s second network in China, Beijing Oriental Rihai Advertising Co. But for this assignment to develop a new product line, Kangshifu opted for a new agency, according to Chen WeiWei, Y&R’s CEO, Greater China in Shanghai.

Baidu teams up with EMI to create online music service
BEIJING--The battle between internet search engines in China intensified this week, when China’s leading player, partnered with EMI Music, the world's largest independent music company, to launch an advertising-supported online music streaming service in China.

It is also an effort by Baidu to end its legal woes. In the past year, Chinese portals that allow free music downloads have been sued for copyright infringement by EMI and other international music labels including Universal Music Group, Warner Music Group and Sony BMG Music Entertainment.

The partnership is a step toward controlling piracy, according to Norman Cheng, EMI Music’s chairman-CEO, Asia and director of Typhoon Music in Hong Kong, “something that is important to EMI in the Chinese digital music market.”

The EMI agreement allows Baidu’s users free access to the Chinese music portfolio in EMI's Typhoon Music through an EMI Music Zone music search channel that Baidu will set up on its site. It will include recordings from artists such as Jolin Tsai (Taiwan), Stephanie Sun (Singapore), David Tao (Taiwan), Sandy Lam (Hong Kong) and Richie Ren (Taiwan). While consumers listen to the music for free, they will be exposed to internet advertising. EMI and Baidu will share the revenue generated by the advertising.

Baidu is the largest internet portal in China and the fourth largest in the world. According to the 2006 report from the China Internet Network Information Center, Baidu has a market share in overall search of 62.1%. The latest report from iResearch, a leading market research company for China's internet industry, calculates that the company has an 84% share of music searches. Despite their global popularity, U.S.-based search engines like Google and Yahoo rank far below Baidu in China.

“We believe this partnership with EMI will drive value for Baidu users, content providers and advertisers. It also sets the stage for future co-operation between the internet and music industries,” said Baidu’s Beijing-based chairman-CEO Robin Li in a statement.

Reorganized VW reverses sales slide in China by cutting costs, launching new models
BEIJING--Volkswagen Group (VW) has reversed its slide in China, now the company’s largest market. VW and its two joint ventures in China, Shanghai Volkswagen and FAW-Volkswagen, sold 711,298 vehicles in mainland China and Hong Kong in 2006, up 24.3% over the previous year, and a record high for the German auto company in China so far. Sales of the Volkswagen brand group rose 22.8% to 628,807, including 6,021 imported vehicles. VW's Audi sales were up 38.8% to 81,708 vehicles, including 4,486 imported units.

“Competition in the industry has undoubtedly become much fiercer in 2006; however, we have exceeded our internal sales targets for 2006 by far and have met the goal we set for ourselves of stabilizing our market share due to our efforts to bring our company towards full customer orientation,” said Winfried Vahland, VW’s Beijing-based CEO-president, China in a company statement.

Faced with a growing number of rivals from the U.S., Europe, Japan, South Korea and China itself, VW fell from a leadership position with hall of all China's passenger car sales to second place behind General Motors Corp. Over the past two years, the company has restructured its dealer networks, controlled costs and launched models better suited to the Chinese market, such as the Passat Lingyu, Polo Jinqing and Jingqu, Sagitar, New Bora, Audi A6L and Audi A4.

VW also started to use its Olympic Games sponsorship to further grow its brands in China and will launch more models, such as the Skoda Octavia from Shanghai Volkswagen and the Magotan from FAW-Volkswagen.

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