China is a vast market that simply can’t be averaged. Karl Wu, CEO Havas Media Group, Greater China and Donald Chan, CEO Havas Creative Group, China and a 2017 Cannes juror share what marketers need to know about the modern Chinese consumer. Plus, they reveal the biggest opportunities—and challenges—for advertisers in China.
Tell us about your backgrounds.
Donald: Well, I graduated as an electrical engineer. My first job was at a major telecommunications company in Hong Kong. It was there that, by coincidence, I was introduced to some agency folks during a product briefing. It was love at first sight when I heard what they were doing and saw how stylish they looked. So I sent application letters to all the main agencies in Hong Kong, but got no response.
Then a friend who was poached by a competitor asked me to take his place at an interview. That was the beginning of more than 20 years of a fascinating journey in advertising. I have worked for Leo Burnett, JWT, and TBWA. And the very first agency who took a chance on me was Euro RSCG, now Havas.
Karl: I was born and raised in China. I started with Saatchi & Saatchi in 1995, and then I moved to Saatchi & Saatchi Canada in Toronto in 1998. After some time spent as an advertising manager and digital marketer for Bell Canada, I came back to China in 2003 and rejoined the Saatchi network on the media side at ZenithOptimedia. What attracted me to Havas was its vision of integration and its firm pursuit of its Better Together strategy.
Karl, you’ve said that you “can see the changes needed for our industry to deliver better customer value.” What are some of those changes, and how are the two of you bringing about change at Havas China?
Karl: With all certainty, I can tell you that every client is facing an increasing scarcity of time and money. Budget is always a concern. So clients must do things efficiently and effectively. Speed to market is critical. So in effect, agency offerings must be completely integrated in order to offer integrated customer value.
With Donald, we have set up a Socialyse joint venture, which brings together the rational approach of media and the magic of creative. We have HR, PR, and finance functions—all fully integrated under unified leaderships. We have started integrating our planning teams. In the past, Havas Media Group and Havas Worldwide helped each other by passing along business opportunities, but now we don’t just introduce potential clients and leave; we work together until we see results.
What do marketers need to know about the modern Chinese consumer?
Donald: The most important things to remember are the speeds of adoption and change in this market. While there are useful global benchmarks and best practices for global brands, China has leapfrogged in many ways because of technology, especially tech that has changed how consumers communicate, engage, and consume. China has become mobile, almost overnight. The rate of adoption and evolution of mobile applications are now leading the world.
Global brands need to develop customized messaging to address the fundamental differences in specific regions of the country.
Karl: One: Chinese consumers are modernized, not Westernized. Brands must be culturally sensitive. Two: Chinese consumers are bombarded with information. Amid all the noise, brands must stay visible and advertise. Three: There’s always opportunity in this vast market. Stay determined and be persistent.
How is the evolution of digital continuing to affect marketers and brand messaging in China?
Donald: Major digital platforms here are more extensive and life encompassing. The emphasis is mostly on behavioral insights and contextual messaging.
Karl: China has its own unique digital ecosystem. Marketers used to mirror the United States and produce a similar experience or platform in China. Baidu, for example, is the Chinese version of Google. But now, this has changed. Chinese internet giants are no longer simply a Chinese versions of their U.S. counterparts; they have grown to become massively bigger ecosystems. The digital eco-life difference changes how people receive, interpret, and share information and, as a result, drives behavioral change.
Tell us about some of the biggest opportunities—and challenges—in your local markets.
Karl: First, the challenges. Finding capable people. They often come at a high cost. Also, China is a scale and speed market. Business value is largely made through transactional means. Without scale, there is no chance for a transaction.
Opportunities: Integration. We are the only international agency that is pursuing this strategy, and we have all it takes to do so. In China, in my view, integration is no longer a strategy on paper; it has become more and more of a reality that we are benefiting from.
What are some of the recent wins or creative works that you’re most proud of?
Donald: Through a true Village effort, our team recently won a competitive pitch for a new product launch of the men’s skincare business of Inoherb, a leading domestic skincare brand in China. In fact, Havas Group China has registered a strong performance since the beginning of 2017, winning a series of new businesses, including Bank of Communication Credit Card, Continental and General Tire, Monster Energy Drink, Dubai Tourism, and AMD.
Which innovations in advertising are you most excited about?
Karl: Augmented reality. Advertising has shifted from information transmission to experience creation. AR can greatly enhance the experience and thus create connection and bonding.
Donald: Augmented reality and virtual reality. A fundamental change in the way we create real-time scheduling, planning of content, and multidimensional designing of experiences.
What are some of the steps that you’re taking to advance the Together ethos?
Karl: We will combine, unify, and simplify the China Village leadership team. More details to be unveiled soon.
What advice do you have for someone who is just starting out in the industry?
Donald: Creativity is the ultimate value that we offer, especially amid the changing landscape. Creativity comes from everyone in the industry, an account person, front-office person, a technician, a data analyst, a media planner, a trader, and, obviously, a content developer.