Since Mr. Chapman-Banks joined the U.S. company in May 2005, Motorola's market share has more than doubled from 10% to 22%, according to Sino Market Research. Motorola has closed the gap with leader Nokia Corp., whose market share is almost 30%, and left behind No. 3 player, Samsung Electronics, with a 10% share.
While at ad:tech, he spoke with AdAgeChina Editor Normandy Madden about the digital music download platform MotoMusic, Chinese youth and Japan, still the global leader in cutting-edge mobile phone applications.
AdAgeChina: Where did you start in revitalizing Motorola’s image in China?
Ian Chapman-Banks: I said “no” to conformity, and lack of consistency. What I said “yes” to, is that we have to be completely consistent in every retail store, in every city in every market, because as an international mobile brand, we are essentially selling to global tribes, who tend to have the same aspirations and goals. Why would you run different campaigns in Shanghai, Beijing, Chengdu, Hong Kong or Taipei? So I decided on entertainment, fashion and music. The other two things I thought about are brand preference and whether when someone walks into a store, is the store owner, clerk or promoter actually recommending Motorola.
AdAgeChina: You’ve visited Japan nine times in the past nine weeks. How far behind Japan is China at this point?
Mr. Chapman-Banks: Japan is the boom that keeps on booming. From an infrastructure point of view, Japan has high-speed, 3G networks. That’s the main difference between that mobile phone market and China. We don’t know when it will happen, but at some point, China will become a 3G market. Broadband and a high-speed market is the next big promise. It’s already happening in Japan, and in South Korea, so it’s good to learn from what our teams there are doing. When I look at what’s happening on phones in Japan, it’s amazing, they are booking holidays and train tickets, checking the weather, checking when the next train is leaving Tokyo to outlying cities and actually buying the train tickets online. People in Japan do everything on a mobile phone that people do on a PC in the rest of the world. Japanese are now so accustomed to that.
AdAgeChina: When do you think China will get to that point?
Mr. Chapman-Banks: Great question. It will get there in a different way. Social networking will probably evolve differently here in China. We’re already developing applications in our phones so you can start to make purchases with them, and MotoMusic will hopefully develop into an e-commerce site at some point.
AdAgeChina: From an advertiser's perspective, Motorola has created its own music ecosystem in China with MotoMusic. Songs that are not available elsewhere are preloaded on phones and the brand appears in music videos made by Jay Chou, an Asian pop star sponsored by Motorola. Are you looking for partners so other advertisers can be part of this environment?
Mr. Chapman-Banks: I don't make a penny out of MotoMusic. In fact, we lose money. We give all the proceeds to the artists. My philosophy was to kick-start the whole music community in China and my goal is to make MotoMusic sticky enough to fund it with relevant advertising, because it's difficult to have a business model when you're only charging two or three RMB (25-38 cents) per track. That basically covers fixed costs. But at some point, as we get 20 or 30 or 40 million people signed up, and we're at about four to five million at the moment, it would be an interesting proposition to get some advertising.
AdAgeChina: What's your biggest challenge in China?
Mr. Chapman-Banks: What I really strive for is brand preference, and I want to stick to fashion, entertainment and music. From a product perspective, I think music is a great enabler. We want every phone we ship to offer a music experience. Even my phone, a V3i model, has an MP3 player that can carry 400 or 500 songs. So we have make sure there is a music component to everything that we do.
But even before we get to that, it’s about coverage. How do you reach 1.2 billion people? It’s tough. Outdoor and print media really don’t exist here outside of tier one and tier two cities. The web is an interesting way of doing that. Even in smaller cites, all young people are online in internet cafes. We don’t know where the market is going, but we want to make sure we’re pretty close to current trends and make sure we appeal to our target market, not in a conventional way like with banner ads. We try to engage consumers with an interesting experience, because we have to build brand preference over a longer term than FMCG companies, for example. Chinese aren’t buying phones every day; the cycle for decision-making is three or four months. We have to make sure consumers are engaging with Motorola at each level in the decision-making process, especially in this market, where a phone can cost the equivalent of a month's salary. That's a big challenge.
Other people news in Greater China
[beijing] Hong Kong-based Star Group has named Jack Gao as CEO, China, responsible for developing its strategic and business directions while also overseeing day-to-day operations in the mainland. Mr. Gao has also been appointed VP of Star's parent company, News Corp., and will be chief representative of its Beijing office. Previously, he was VP at Autodesk Inc., responsible for its operations in Greater China and India.
[shanghai] Doug Pearce has resigned as CEO, Greater China for Starcom, following the Publicis Groupe media agency's decision to split the Greater China role into two business units, north and south. Mr. Pearce will remain based in Shanghai but has not disclosed in what role.