MNCs dominate China spend tally for 2004

CHINA: Multinational adspend on personal care brands surged forward in mainland China last year to occupy half of the slots in a list of the country's biggest-spending brands, compiled by Nielsen Media Research (NMR).

NMR data, derived from ratecards, showed that Procter & Gamble doubled the advertising firepower behind its Oil of Olay and Rejoice brands, while ratcheting up spend on Crest and Head & Shoulders by two-thirds.

Meanwhile Colgate-Palmolive souped up adspend on its flagship Colgate brand by 152 per cent to become the second MNC after P&G to enter the league of China's 10 biggest-spending brands.

Adspend on the only local toiletries brand on the list, Aoqili, remained relatively stable with a 16 per cent lift.

The massive marketing boosts to single brands signals increased MNC interest in markets beyond the top tier cities, encapsulated by P&G's ascendancy to become the biggest bidder at the annual airtime auction held by national broadcaster, CCTV, late last year.

Although P&G brands led the march with some of the biggest-spending brands of last year, NMR reported significant boosts to adspend from other foreign firms such as Unilever, KFC, Coca-Cola and McDonald's.

These rises contributed to an overall 32 per cent increase in ad expenditure across the board to almost Rmb200 billion (US$24.1 billion) last year, although this doesn't factor in any negotiated discounts, which can remain substantial in certain parts of the market.

Nielsen expected the spread of marketing expertise imported by non-Chinese firms to stimulate advertising across the market. "Local enterprises are very keen on competing with foreign brands," said Rita Chan, Greater China director for Nielsen Media Research. "There will be a lot of new brands launching every year. It's a very healthy scenario. Chinese manufacturers are very fast at learning marketing, strategic and production skills."

In tandem with the increased profile of Western brands, the category mix of the biggest spenders also started to resemble other developing and developed countries a lot more in 2004, although heavy outlay from professional services, real estate and education showed that the market remains distinctive.

"The Chinese market is becoming more like other markets and the number of anomalies seem to be decreasing," said Publicis China CEO Neil Hardwick.

Chan noted that the Chinese ad market has been characterised by sudden, intense bursts from certain sectors, such as Chinese alcohol brands, followed by audio and video products in the '90s and, more recently, from the tonic and vitamin category, but added it was difficult to tell which sector might continue this trend into the future.

Although the amount ploughed into ads for tonics and vitamins remained relatively stable, adspend still outweighed most other sectors while professional services rose to become the most profligate category on the back of heavy advertising by private hospitals.

CHINA'S BIGGEST SPENDING BRANDS IN 2004

2004 2003 %

Brands Category Rmb 000's Rmb 000's Increase

Oil of Olay Toiletries 5,785,411 2,833,673 104

Gai Zhong Gai Tonic 3,655,820 2,138,561 71

Rejoice Toiletries 3,473,604 1,739,762 100

Crest Toiletries 2,333,967 1,394,658 67

Sanjing Pharm Pharmceuticals 2,210,950 1,275,408 73

China Mobile Communication 2,161,817 1,988,991 9

Aoqili Toiletries 2,119,490 1,824,731 16

Head & Shoulders Toiletries 2,078,405 1,245,353 67

Huangjindadang Vitamin 1,978,554 2,063,940 -4

Colgate Toiletries 1,842,589 730,016 152

Note: The figures are based on gross rate card cost without taking any

discount into consideration. The year-on-year comparison includes

increased market coverage in 2004.

Source: Nielsen Media Research.

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