AdAgeChina's Top 10 Stories of the Year

Everyone Was Talking About Tainted Toys, but Nothing Outdid the Olympics

By Published on .

From the marketing frenzy around next year's Olympic Games in Beijing to the country's sluggish efforts to go green, here's a look at the 10 biggest news and trend stories out of China in 2007.
1. Sponsors kick off massive Olympic ad efforts.
The Olympic Games' opening ceremony in Beijing isn't until Aug. 8, 2008, but for sponsors such as Adidas, Coca-Cola, Lenovo, Volkswagen, UPS and McDonald's, the games are under way. Efforts range from Adidas' massive marketing campaign to Lenovo's roadshow covering thousands of Chinese cities.

Marketers see the 2008 Olympics as a once-in-a-lifetime opportunity to connect their brands with Chinese consumers, who are fiercely nationalistic about Chinese teams and athletes, as well as the very notion that their country will host the Olympic Games.

But execution is a tough job, since the Beijing Olympics organizing committee has sold sponsorship status to dozens of companies at the local, regional and national levels. Chinese consumers are confused about which companies really are Olympic sponsors, media rates have skyrocketed, and clutter is a huge issue for sponsors and non-sponsors alike.

2. Manufacturing problems damage "Made in China" label.
China's global image was hit by problems with product safety and quality that led to recalls of products ranging from pet food to toothpaste. Mattel alone recalled millions of toys such as Batman action figures and Big Bird dolls, and parents doing holiday shopping tried to avoid products made in China -- which means just about everything.

Until now, U.S. consumers saw Chinese products as cheap but decent, much the way Americans once regarded products made in Japan. Now, many cautious consumers wonder if Chinese goods are even safe, much less well-made. Besides tarnishing China's international image, the safety scandals created big problems for Chinese advertisers ambitious to become global brands.

3. Youth marketers let consumers drive campaigns.
To forge connections with young, urban, white-collar Chinese, advertisers such as PepsiCo and Nokia increasingly are giving control to consumers. Two of the year's most innovative campaigns -- the Pepsi Creative Challege and Nokia's Ncool site -- were built around user-generated content.

Pepsi challenged consumers to submit personal photos to a Pepsi website,, and vote on other contenders' pictures, with 84 winners getting their images on Pepsi cans in China.

In November, Nokia launched Ncool, an online meeting point marketed with an edgy online and viral campaign by Eight Partnership about the world's supposed first rapper -- a farmer from Inner Mongolia called MC Farmer -- that was seeded on YouTube-like Chinese video sites such as Tudou and Youku.

4. Yi Jianlian joins NBA.
Chinese basketball fans and sports marketers were delighted to see one of China's most talented players, Guangdong native Yi Jianlian, take part in the 2007 NBA draft and sign a multiyear contract with the Milwaukee Bucks in late August. Mr. Yi follows Yao Ming, China's greatest basketball player, who plays for the Houston Rockets.

Coca-Cola and Nike already have inked sponsorship deals with the highly touted rookie. Sports-marketing experts in China say his talent, on-court charisma, off-court geniality and good looks could make him a bigger celebrity and corporate endorser than Mr. Yao.

5. Advertisers seize branded-content deals.
With media rates on China's national broadcaster, China Central Television, rising fast ahead of the Olympic Games, advertisers are turning to branded content.

Groupe Danone sponsored a 13-episode Nickelodeon TV show that teaches kids to draw, including pictures of the royal character that is the icon of Danone's Prince cookies. Coca-Cola created 13 free, 10-minute animated films featuring the cute little character from its Qoo soft drink.

Ford Motor Co. took 18 Chinese on a 21-day road trip in July called China Excitement Challenge and, with JWT's help, filmed their experiences reality-TV-style for a website,, that attracted 32 million visitors.

6. China puts an end to talent-based reality shows.
Despite the huge popularity of "American Idol"-style talent contests in China, local media regulators clamped down on them. Starting Oct. 1, the shows were banned from allowing viewers to vote for contestants, air during prime time or offer prizes to attract contestants. Observers suspect the Chinese government wants to protect national state broadcaster CCTV from competition and is also uncomfortable with giving Chinese a chance to vote.

7. Alipay lets Chinese shop online globally.
Alibaba Corp., China's largest e-commerce company, launched an online payment service called Alipay that for the first time makes it possible, even easy, for tens of millions of middle-class Chinese to shop online anywhere in the world. Since few Chinese have credit cards, they lack a secure payment method for shopping online. Alipay lets them shop in 12 foreign currencies, including U.S. dollars, Japanese yen and euros.

8. Multinational marketers move beyond tier-two cities.
Most multinationals start in Beijing, Shanghai and Guangzhou and then come up with marketing, sales and distribution strategies for tier two, as China's provincial capitals are called. Now major marketers such as Unilever, Procter & Gamble, McDonald's, Lenovo and Coca-Cola need to expand into third- and fourth-tier cities to keep growing.

Tier three includes about 150 county capitals with populations of more than 1 million. Tier-four towns have 100,000 to 1 million inhabitants, and tier five is very rural.

Consumers in the lower tiers are poorer, just learning about brands, and marketers' management talent are reluctant to live in or even visit those markets. But marketers are starting to look at them seriously and figure out how ads, products, packaging and distribution have to be adapted from what works in China's more prosperous cities.

9. Demand for luxury goods is rising fast.
Chinese shoppers account for 12% of global sales of luxury goods, such as watches, fashion apparel, perfumes, cosmetics, jewelry, automobiles and premium spirits, and that figure is likely to double within a decade.

Following the market, LVMH was the first luxury fashion brand to hold a runway show on the Great Wall in October, transforming a section into a catwalk to launch Fendi's 2008 collection with 88 models.

Ernst & Young predicts sales of luxury goods in China will grow to $11 billion a year by 2015 from $2 billion.

10. China starts to go green -- very slowly.
China has 16 of the world's 20 most polluted cities, according to Worldwatch Institute in Washington, and 68.5% of Chinese polled in a Synovate study said they were concerned about the effects of climate change -- a higher figure than in the U.S. As consumers, most Chinese won't pay a premium for products marketed as environmentally friendly, but organic foods are making inroads.

Concern for the environment is an untapped opportunity for advertisers. A few multinationals, such as General Electric, China Mobile, P&G, McDonald's and Toyota, did green-based marketing campaigns. In a sign of things to come, state-owned Chang'an Automobile Group became the first Chinese automaker to produce a hybrid car.

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