This month, he is returning to his native London for a new position at Nike. He started his career in the U.K. at agencies like Bartle Bogle Hegarty and Fallon Worldwide. After running his own strategic consultancy catering for the dot-com companies for a year, he traveled to Africa and Australia, eventually landing a position in Melbourne at Clemenger BBDO, Australia's largest ad agency.
After leading an unsuccessful pitch for Nike's Australian business, he was offered a job with Nike in that country. Fifteen months later, he was transferred to Shanghai to help steer the company's brand there ahead of the 2008 Olympic Games in Beijing.
Before he departed Shanghai late last month, Mr. Elworthy spoke with AdAgeChina Editor Normandy Madden about how China’s consumer market has evolved over the past two years.
AdAgeChina: There is a lot of talk about China’s economic potential in the media as well as in corporate boardrooms all over the world. Do you think there’s too much hype about China outside the market?
Ed Elworthy: China already is a major consumer market. It has not necessarily reached the heady highs of the U.S., but it is still a hell of a large population with relatively high disposable income. That makes consumers there an extremely appealing target, if current trends are anything to go by, plus the government is trying to grow a middle class very fast. We believe the hype is thoroughly justified.
AdAgeChina: The next Olympic Games will take place in China next summer. Nike isn’t an official sponsor of the Olympic Games but clearly the event is an opportunity for all major sportswear marketers. What is Nike doing to tap into the event over the next 12 months?
Mr. Elworthy: We are not an official sponsor. However, the opportunity for us is that sports in general will be brought firmly to the front of people’s minds in the next year. Nike already is the official supplier of 21 athletic teams and sporting federations in China, many of which are involved in sports participating in the Olympic Games, and those athletes will compete in Nike gear.
AdAgeChina: There’s a lot of talk right now in sports circles about Yi Jianlian, who has played for Guangdong Southern Tigers and was the sixth pick in the 2007 NBA Draft. He's sponsored by major marketers including Nike and sports marketers predict he will be a sensation. Do you think Yi Jianlian is headed for stardom, and how is Nike planning to tap into his popularity, both in China and overseas?
Mr. Elworthy: We did a marketing campaign in China, including TV, print, out of home and online advertising, around his draft date [in June], which did receive some editorial interest overseas, although the ads didn’t run anywhere else. It was about him and the stage he’s at in his career. We used him several times before that too, such as a spot starring [Chinese Olympic hurdler] Liu Xiang.
Personally, he’s very dedicated to his game. He speaks Cantonese [a Chinese dialect spoken in Hong Kong and by natives of Guangdong province just over the border] better than Mandarin [the official Chinese dialect of the People’s Republic of China], which can be a challenge for sponsors. He appears serious on the court, but off-court he’s very personable and friendly.
There are people who are saying he has more personality that Yao Ming. I wouldn't go that far, but Yi definitely has more athleticism. From a business perspective, his expression through sport, as a pure player, Yi is better for us than someone who can’t express himself on court to the same degree.
AdAgeChina: What is Nike’s primary consumer market right now? Are you still focusing on first tier cities or have you moved into second or third tier markets at this point?
Mr. Elworthy: We have distribution in upwards of 200 cities but we’re focusing on the top two tiers, meaning the 20 or so largest cities. But we do have a national presence through China Central Television (CCTV).
AdAgeChina: How has Nike adapted its global strategy for the Chinese market? What are some of the changes you’ve had to make to the global platform in the mainland?
Mr. Elworthy: Obviously, a lot of the time when you ask that question, people talk about different ways that products are used in different countries, and the requirements of products in different places. We do limited editions and special products for China, yes, but it’s more from an energy perspective than a practical perspective. The perception of our brand is different from country to country to some degree, but globally, our brand has proven to be pretty resilient. It’s one of the lucky few brands that can tap into universal insights of youth and sports.
As a result, a lot of westerners might be surprised at how readily Chinese youth have tapped into it in China at the same level as it is viewed in developed markets. Chinese youth are more influenced by the West than older generations, the way they approach our business, our products and our brand is perhaps closer to how it’s approached elsewhere in the world. That said, there are certain nuances regarding Chinese culture that have to be taken into account, in terms of execution. For example, you can't go too hard on the rebellious nature of youth as you would elsewhere.
The major difference between China and the rest of the world for us is consumers’ familiarity with the Nike brand. You can allow for more familiarity with the brand and the “Just do it” slogan in other markets. Foreigners were brought up on Nike advertising telling us what it was all about. But in China, that wasn’t the case, so we have no more heritage here than any other sportswear brand in this market. Another challenge is the fact that Chinese families don’t always recognize the importance and benefits of sports; they are focused more on education. Factors like these mean we have to tweak the execution a bit, but our strategy essentially is the same as in other markets.
AdAgeChina: Nike is an iconic American brand around the world, like McDonald’s and Coca-Cola. Does being an American company help Nike in China, or is it a negative factor that Nike has to overcome?
Mr. Elworthy: It’s both. and it also depends on whom you are talking to. It used to help more than it does now, especially in major cities. Having American heritage doesn’t have as much cachet for U.S. brands overall as it once did. At the same time, it doesn’t hurt us in any way either.
AdAgeChina: Urban Chinese youth arguably are influenced more by digital media than by ads on TV. Does Nike focus more on digital media in China compared to other major markets?
Mr. Elworthy: I don’t know if we use digital media more here than elsewhere but I can say that for Nike globally, digital is a huge deal for us. That’s not to say we are leaving behind what we did before in traditional media, but we are starting to focus on digital to a huge degree and shifting our focus to digital, which means increased budgets and increased activity in that area. In China, I’d say we pump a higher percentage of our overall budget into digital than other consumer marketers in China. My saying that is pure conjecture but I’d be surprised if there are companies doing more than we are online in China.
AdAgeChina: China can be an enigmatic country for western marketers. What’s the biggest misperception your colleagues in the U.S. or Europe have about the mainland and what do you tell them to correct that misperception?
Mr. Elworthy: People have this view that Shanghai is like Blade Runner, that it’s a city of the future, in a way Tokyo should have been. On many levels that true, around every corner is a new boutique agency or new restaurants. Other people see China as a dark distant place that’s 40 years behind the rest of the world. The truth is in between. I’m looking out my window right now and see a lot of people on bicycles. Shanghai is a huge dichotomy, and the same situation is definitely true of all major cities in China.
AdAgeChina: I’ve heard successful western marketers in China say the key to succeeding in the mainland is figuring out what Chinese consumers want to buy and then selling the right product at the right price point, rather than trying to convince Chinese to buy the products created in the U.S. or Europe. Do you agree with that?
Mr. Elworthy: That should be correct in every market in the world but the problem in China is size. Marketers think the products they make for other countries will also sell to someone here and that’s just lazy marketing. What we're selling is our brand as much as anything else though. How people use our products....of course that matters, but when you move from one-dollar cans of Coke to more premium product decisions, our biggest asset is the strength of our brand. But we do make customized products for China. This year, for example, we did a year of the dog shoe [coinciding with the Chinese zodiac], the trim had fake dog fur and it was made with relevant colors. We do a zodiac shoe every year and some become real collectors' items.
AdAgeChina: Can you describe one key way China has changed over the past two years?
Mr. Elworthy: I’ve noticed more individualism coming out in China’s sports stars and pop stars. When I came here, I was told individualism didn’t exist but that’s not the case anymore.
AdAgeChina: What are you going to miss the most about China?
Mr. Elworthy: A hundred things, and the things I’ll miss are also the things that exasperated me the most. What keeps me awake at night is the sheer quantity of things we could go after here that could make a difference, there is so much opportunity. Working in China is not a search for somewhere to go, it’s deciding on which of the myriad of ways we could go are the ones where we should go first. There’s opportunity everywhere.
Other people news in Greater China
[shanghai] Nitro has appointed Bryce Whitwam in Shanghai as director of integration and operations, a new position. Previously, he was managing director of Ogilvy Action in Beijing.
[hong kong] Publicis Worldwide has promoted Sue McCusker to general manager of its Hong Kong office, a new position, from head of client service, also in Hong Kong.
[hong kong] The Nielsen Company has promoted Hong Kong-based Troy Yang to VP, client consulting of its Bases division, which helps advertisers forecast sales of new products before they are launched and track their performance after they are put in the market.