Q&A: Martin Sorrell on innovation in China

In terms of innovation, what do you see as close on the horizon in China? 

We see innovation in all areas of Chinese business but one hot battleground is the financial services industry as the likes of Xiaomi’s Huoqi Bao, Alibaba’s Alipay and Yu’e Bao and Tencent’s Licaitong go head-to-head with the giant Chinese banks. This will be fascinating to watch and the Chinese consumer will be the ultimate beneficiary.

What do you see as the biggest drivers behind China’s digital evolution?

The numbers in China are staggering and given its scale it’s no surprise that China has become the world’s largest digital market on most measures. With over 600m Internet users (more than 500m on mobile) and $32bn of digital media spend China is a critical market for WPP and our clients. Chinese netizens spend more time online and consume vast amounts of content, they spend more on eCommerce than any other nation and the triumvirate of Baidu, Alibaba and Tencent continue to innovate and expand and play an increasingly large role in people’s everyday lives.

What do you see as the most significant opportunities and challenges in the digital space for WPP’s clients in China for the year ahead?

Programmatic media is still in its infancy in China so this is a big opportunity for clients, agencies and media owners alike but it will rely on more accurate measurement methodologies and increased cooperation from media owners.

Ecommerce continues to be a priority in China and and increasingly brands are looking to take advantage of O2O (online to offline) opportunities and make serious investments in this area.

Are mobile and data themes still ‘the next big thing’ for the industry in China? 

Mobile has already become “the next big thing”. WeChat has over 500m users and there are 150m users on Weibo, billions of dollars are spent using mobile phones and China is leading the way in hardware innovation via the likes of Xiaomi, OnePlus, Huawei, Lenovo etc.

As for data, this is a consistent theme with clients. It is true that the availability of data and transparency over measurement is lower in China but with digital budgets increasing we are seeing increasing demand for the kind of services Kantar offers in this respect.

Do you expect China’s entrepreneurs to be significant contributors to marketing's digital evolution on a global basis? How do you see that playing out?

Yes. It certainly won’t be easy as they will face international competition from the likes of Google, Facebook, Twitter and Amazon but there is no doubt Chinese entrepreneurs have ambitions beyond their borders. That said, they may not go for the immediately obvious option. I recently interviewed Jack Ma of Alibaba and he said his focus would be on Europe and Asia rather than Amazon’s own backyard in the US. We have seen this with Xiaomi too who have expanded to South East Asia, India and Brazil, targeting emerging market consumers.

As boundaries between marketing’s different disciplines blur, how do you expect the industry to change in China?

I think the boundaries have already blurred. Clients are expecting all disciplines to be focused on digital and its possibilities. Everyone working in this industry, regardless of discipline, will need to be very focused on digital and the possibilities it offers, if they aren’t already.

 

Editors note: This Q&A first appeared in the 'Digital Next: China' insert distributed at Cannes and sponsored by Tencent