First chinese agency to open in U.S.

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BEIJING -- China expects to open its first advertising agency in the U.S. this month. Liu Yanming, chairman of Hairun International Advertising Co Ltd, is in the U.S. to oversee the opening of a Los Angeles office, according to reports in Business Weekly.

A Los Angeles office is the first step in an international expansion drive for the company, which is currently focussing solely on the U.S.- the biggest foreign market for Chinese products and home to one of the world's biggest Chinese- origin populations.

Hairun hopes that setting up an agency branch in the world's movie capital will help introduce more Chinese products to the U.S., as well as bring more U.S. goods to China. Foreign companies often prefer to employ local Chinese agencies for their promotions in China because of their local knowledge and contacts.

Liu said that prices of Chinese-made products are generally low in the U.S. because of a lack of promotion. Also, high promotion costs in the U.S. prohibit most Chinese companies from advertising there.

Hairun's first work in the U.S. will be for shampoo made by Chongqing Olive Cosmetics Co Ltd, one of the largest manufacturers of daily-use toiletries. The company expects a $120m sales volume this year.

Olive products mostly are made of natural products and herbs, which is expected to appeal to U.S. customers, Liu said. Olive spends about $12m a year on advertising with China Central Television Station.

Hairun will promote Olive products in department stores with special counters and billboards and will also advertise on public transport ad sites, Liu said. Its initial target will be Chinese-Americans and Chinese living in the U.S.

Hairun's Los Angeles office will also invest in movie production and TV shows. The first show lined up is based on a script called ``Los Angeles Hummingbird.'' It was written by Los Angeles resident Gu Xiaoyang, Liu said. Chinese movie star and director Jiang Wen has expressed enthusiasm to direct and play a leading role in the $2.4m series about Chinese-Americans. It will be marketed in the U.S. and China.

Established in 1989, Hairun is a joint venture between the Ministry of Internal Trade and Hong Kong China Advertising and Printing Co Ltd.

Hairun had $48.2m in billings last year. That figure is expected to hit $54.2m this year, Liu said. The company's major clients include Lux, VV Soybean Milk Powder, Flying Pigeon Bicycles, Master Kang Instant Noodles, Samsung and Jinro.

Copyright August 1997, Crain Communications Inc.

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