Jenny Chan 陳詠欣
May 21, 2013

M&C Saatchi ceases creative operations in Hong Kong

HONG KONG - As M&C Saatchi's office in Hong Kong becomes less and less significant in terms of revenue contribution, its core creative and account departments have been closed after a run of 18 years in the territory.

M&C Saatchi ceases creative operations in Hong Kong

The group's Hong Kong office used to be the agency's Asia's hub, overseeing businesses in Japan, Greater China, Malaysia, Singapore and India. (The Singapore office closed in 2008 mainly because of personnel issues, but reopened again last year.)

"We now want to be good in Shanghai and Singapore (new twin-hubs), so there is no real reason to keep Hong Kong," Chris Jaques, CEO of M&C Saatchi Asia, told Campaign Asia-Pacific. "It's not a very important centre anymore. It's so small it really doesn't matter in the scheme of things." 

Hong Kong had a "real role" up to six or seven years ago as the gateway to China, but now "everyone who needs to be in China is already there", Jaques said. Hong Kong is not able to compete with China in terms of market size, and not with Singapore in terms of government incentives to set up companies, he added.

The group has not been investing in Hong Kong operations for a year and a half, he said, so it is a "simple decision to make". The office was already "struggling" financially in 2011.

Since February this year, remaining staff, about 14, have subsequently left the agency and found other jobs. Still-active clients like Mandarin Oriental, City Of Dreams, Sands Macau, China Light Power (CLP), NBC Universal, British Council, CPA Australia, Austrade, and HK Broadband were given at least four months advance notice to look for new agency partners.

Jaques will still be based in the city. Hong Kong is "still geographically a good location in the middle of Asia" for him to live and work, he said.

Hong Kong now serves only financial and M&A functions, with some regional coordinators for network clients and a skeletal finance department. Around August, the smaller team will move out of its Taikoo Place location, where it used to occupy the entire 29th floor at Cambridge House in Quarry Bay.

Set up in 1995, the Hong Kong office at its peak represented a client roster of British Airways, Qantas, China Construction Bank, Convoy Finance Group, FairTaste, FTI Consulting, Hong Kong Independent Commission Against Corruption (ICAC), InvestHK, Yee Tung Heen, and UA Finance.

Sylvia Lee, former MD of the agency from 2006 to 2008, spoke of difficulties it was facing during her tenure. "People always got us mixed up with Saatchi & Saatchi, and I knew we needed to break the confusion then," she said. "In order to do that, we must get high-profile clients. We won HKBN without a pitch then, and also launched the Elements Mall in a fully integrated campaign that won stuff at the Effies—never before".

Unfortunately, Hong Kong billings were affected by economic headwinds and account moves, plus regional losses for a number of years.

"At that time, the key Mandarin Oriental account moved to the UK, we kept only below-the-line duties in Hong Kong," Lee said. "And Anna Sui (under P&G Prestige Products) was moved to Singapore." 

Furthermore, regional losses of Tourism Australia (another major client) and Jet Airways in India, all at once in the 3rd and 4th quarter of 2008, caused the share of billings for the Hong Kong office to diminish.

"No matter how many local businesses we won, there was no way to compensate for or replace all those significant regional losses," said Lee, whose position was empty for a while after she quit.

"Going after the megabucks (regional accounts) are good, but it would have been better if regional management tried to understand the local market," she said. "There was once they dictated us to turn down a CSL pitch invitation, which i thought should not be so." 

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