FYI 12.02.2009

L'Oreal Rehires Mindshare and Optimedia; Lenovo Buys Back its Mobile Handset Unit for $200M; China Eastern Airlines Joins Taobao Mall; Disney Will Produce a Chinese Version of High School Musical

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Following a four-month review in Shanghai, L'Oreal has reappointed both of its incumbent media agencies in China, WPP's Mindshare and Publicis Groupe's Optimedia. The agencies will continue to manage the French cosmetic company's television buying business in the mainland.

Interpublic's Univeral McCann and Aegis-owned Vizeum also participated in the review, "which was conducted to meet corporate requirements that agencies be reviewed on a regular basis," said George Li, L'Oreal's media director for China in Shanghai.

L'Oreal has divided its media business between the two agencies for the past four years, he said.

L'Oreal also reappointed Vivaki's Zed Digital, to manage its digital buying business, following a review against WPP's Mindshare Interactive, Focus Media's online advertising subsidiary Allyes and Hylink Advertising Co., a local digital agency in China.
Lenovo Group has bought back its mobile handset unit for $200 million in cash and shares. The Chinese computer company acquired 100% of Lenovo Mobile Communication Technology from a group of investors led by Hony Capital, the private equity arm of Legend Holdings. Lenovo divested Lenovo Mobile in March 2008, when the company was facing major losses, to focus on its core PC business.

Lenovo is currently China's third-largest mobile phone brand, and the No. 1 domestic brand.

Although computers remain Lenovo Group's core business, China's telecom market has changed dramatically in the past 18 months, and the mainland is now expected to become a major mobile internet market.

China is already the world's largest mobile phone market in subscriber numbers.

Some industry analysts predict China's mobile internet market will exceed $16 billion by 2014, fueled by the rapid growth of 3G mobile broadband.

"As Lenovo's global PC business continues to make steady progress, we view mobile internet as a key growth opportunity moving forward globally," said Lenovo's CEO Yang Yuanqing in Beijing.
China Eastern Airlines has formed a strategic alliance with Alibaba Group's Alipay and Taobao subsidiaries to develop the airline's e-commerce business. Alipay will provide online payment support for ticket sales on the China Eastern website (www.ceair.com), and China Eastern will open an online flagship store in the Taobao Mall to sell tickets directly to customers for domestic flights.

Alibaba says Taobao has more than 145 million registered users. The site's popularity in China has attracted other marketers. Uniqlo, Procter & Gamble, Bestseller and Lenovo all have online retail storefronts in the Taobao Mall, launched in April 2008, and rely on Alipay to facilitate online payments.
The Walt Disney Company will produce a Chinese version of "High School Musical," its third local co-production in the past two years, with Shanghai Media Group (SMG) and Huayi Brothers Media Corp. The U.S. entertainment company said "Disney High School Musical: China" will be released in summer 2010.

Created for Chinese audiences, the film tells the story of a new student who meets a gifted young man with whom she shares a secret passion for singing. With the help of their friends they overcome the odds to win an inter-school singing competition. Disney High School Musical: China" is being filmed in Shanghai.


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