What’s missing in the chain leading from the factory floor to the check-out counter are enough high-quality marketing services companies connecting shoppers with brands, according to TBWA Worldwide, which has opened a Shanghai office for its retail marketing division Integer.
China’s retail communication “is still at a relatively slow development pace compared to Hong Kong and Singapore,” said Eric Wong, 34, Integer’s general manager in Shanghai. “But it’s certainly a huge market that more and more foreign brands are entering, so we can see the need for an agency like Integer here, which provides interactive and experiential communication ina retail environment."
The Hong Kong native has lived in the mainland off and on for a decade. During the past two years, he was business development director in China at Tequila, a global below-the-line marketing shop operated globally by TBWA. Before that, he was an account director at Ogilvy & Mather, Hong Kong.
Integer will handle TBWA clients as well as independent business, said Mr. Wong, who will work alongside Mike Chou, Integer’s group account director in Shanghai, previously director of business development at the agency’s office in Dallas, Texas. In the U.S., where Integer is based in Denver, Co., its clients include Procter & Gamble, Molson Coors Brewing Co., Hewlett-Packard and Visa.
TBWA has also established Integer offices in Paris and Tokyo, but its Shanghai team faces special challenges. China is experiencing massive growth in the number and size of retail operations like France's Carrefour, Germany's Metro, Sweden's IKEA, Kingfisher-owned B&Q in the U.K. and Wal-Mart, Best Buy and Home Depot from the U.S.. All those retail giants are opening new stores in China as quickly as possible.
Foreign chains are not the only ones benefiting from the boom in sales. China's largest electronics retailer, Gome Electrical Appliances Holdings, said its profit surged 75% in the first quarter of this year.
"And don't rule out mom-and-pop stores, since they still account for the majority of retail outlets in China," warned Mr. Wong. "There are more choices of channels and merchandise from brands than ever before. Shopping has become more enjoyable so that now it is kind of like a lifestyle. This is a major change from the environment here when I arrived in China ten years ago. From the marketer's point of view, more retail channels helps drive consumers to brands and products, but it also creates more competition. The pie is bigger, but there are more slices within the pie."
Closely following the industry's explosion into tier two and tier three cities, the agency’s parent, Omnicom Group, has been an aggressive player at tapping into field marketing and other below-the-line opportunities in China for the past couple of years. Besides Tequila, TBWA operates Agency.com, an interactive agency. BBDO Worldwide recently set up Proximity in China, DDB Worldwide has Tribal DDB offices in Shanghai and Hong Kong.
Last year, Omnicom acquired Unisono Fieldmarketing International, a Chinese agency specializing in retail channel management, and has established a Chinese division for its Radiate field marketing network. Other holding companies including WPP Group and Publicis Groupe also are expanding in the area.
While Integer isn’t blazing new ground in China, it is one of the few divisions to specialize in retail communication, one of the least developed--and most promising--areas in below-the-line marketing.
"Not many marketers in China connect with shoppers at a high level. It’s not just about connecting shoppers with products but also with brands. To do that, you have to be more inventive and make use of all six senses, not simply tasting or touching a product," said Mr. Wong.
"In-store communication and promotions in China have become more sophisticated in the past few years, but there is still a big gap between what's actually happening and what's possible. The gap is closing, but it could be closing faster."
Other appointment news in Greater China
[hong kong] Glenn Bartlett has resigned as exec creative director, China at BBDO Worldwide’s Proximity arm in Shanghai, a position he held less than three months, to join JWT in Hong Kong as group creative director, a new position in charge of the agency’s SmarTone-Vodafone mobile phone business. He will work with JWT’s two other group creative directors in Hong Kong, Greg Sutcliffe and Steven Lee. (See also "Proximity's Glenn Bartlett, AdAgeChina, March 21, 2007)
[shanghai] Shanghai General Motors, the joint venture between General Motors Corp. and Shanghai Automotive Group, has named Robert Socia as executive VP. Currently president and managing director of GM's operation in South Africa, Mr. Socia succeeds Chris Gubbey, who has been appointed chairman and managing director of GM Holden, the U.S. car company's Australian subsidiary, effective July 1. Mr. Gubbey, meanwhile, succeeds Denny Mooney, GM's VP, global vehicle systems and integration.
[shanghai] M&C Saatchi has appointed Tony Yeung as exec creative director and David Ma as director of client services in China, both based in Shanghai. Previously Mr. Yueng was group creative director at Lowe Worldwide, Shanghai, and at M&C, he succeeds Violet Wang, who has left the agency. Mr. Ma, previously the commercial director at Far East Tone in Taipei, succeeds Angela Hsu, recently promoted to general manager of M&C Saatchi, Shanghai.
In Hong Kong, meanwhile, the agency has appointed two co-exec creative directors, Sandy Chan and Simon Handford, effective mid-June. Currently, Ms. Chan is the co-ECD at Leo Burnett Worldwide, Hong Kong, while Mr. Handford is the co-ECD of Ogilvy & Mather, Hong Kong.