FYI 6.03.2009

Jay-Z 's Rocawear Fashion Brand Is Heading to China; Neil Cotton Will Relocate From Shanghai to Singapore in Regional Y&R Role; 3G Is Changing China's Mobile Landscape Says CTR Survey

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Jay-Z 's Rocawear fashion brand is heading to Asia through a marketing and distribution deal with Bosideng International Holdings, a mainland China-based apparel company.

Rocawear products include men's and women's sportswear, footwear, outerwear, handbags, belts, jewelry, sunglasses and children's clothing. The Rocawear line was founded by Jay-Z, whose real name is Shawn Carter, in 1999. He sold the rights to the collection to Iconix Brand Group in 2007 for $204 million.

The Rocawear deal in Asia was inked between Bosideng and Iconix China, a 50-50 joint venture between Iconix Brand Group and Hong Kong-based Novel Fashion Holding. Iconix China also has distribution agreements in Asia with DoRight for its London Fog brand and an agreement with Mecox Lane Limited for its Rampage brand.

Bosideng's retail distribution network includes 5,800 retail outlets in more than 65 cities in China. The company owns six core brands--Bosideng, Snow Flying, Kangbo, Bingjie, Shuangyu and Shangyu.

Bosideng will manufacture and distribute Rocawear men's and women's products in Greater China, starting in spring, and plans to open over 300 Rocawear stores and departments in three years.
Neil Cotton will relocate to Singapore from Shanghai as Young & Rubicam's chief strategy officer, Asia. He will oversee development of strategy for Y&R's clients in Asia, working with Ambar Brahmachary, Y&R's CEO, Asia and Marcus Rebeschini, chief creative officer, Asia.

For the last two-and-a-half years, Mr. Cotton has run his own communications planning consultancy, GMT+8. Prior to that, he was head of strategy for Bates and Lowe Worldwide in Asia, based in Hong Kong.
  China's telecom industry entered the third-generation technology era in January 2009, when the Ministry of Industry and Information Technology granted 3G licenses to the three main operators--China Mobile, China Telecom and China Unicom.

All three companies are rushig to compete in this new market, and consumers are hoping for value-added services but exhibit little brand loyalty, according to a CTR Market Research study, conducted using telephone interviews with 1,909 consumers in 10 Chinese cities.

"Users and potential users see that 3G represents the fashionable and innovative high-technology, and it would enrich their experience through its multimedia functions," said Michael Zhan, CTR's research director in Beijing.

But the new technology will probably trigger a change in the telecommunications market. China Mobile, with 75% of China's mobile phone market, risks losing subscribers, while China Telecom is likely to surpass the No. 2 player, China Unicom, in promoting 3G services.

The CTR survey indicates that Chinese consumers' brand loyalty is low. Only 22% of consumers are loyal to a specific mobile phone service provider, compared with 42% of consumers worldwide. About 34% of subscribers are looking for better choices as they are not completely satisfied with the service from their current provider.

The survey suggests China Mobile is best able to keep its existing subscribers, with over 60% of current users planning to continue to use its 3G service. China Mobile's 3G service is attractive to 42% of China Unicom's users and 33% of China Telecom's users.

Nevertheless, Mr. Zhan said, China Mobile risks losing subscribers "as 60% is obviously lower than its present market share at 75%. In particular, 15% of users tend to choose China Telecom (11%) or China Unicom (4%) for their 3G services."

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