Ogilvy wins Tsingtao in China

The account win was a joint effort between Ogilvy & Mather in Beijing and Shanghai and the scope includes all products under the Tsingtao Beer brand including Tsingtao Draft and Tsingtao Light.

Five other agencies are believed to have been involved in the review. A source close to the business said Tsingtao has a track record of re-pitching its business every year.

Tsingtao’s overall spend on media in China was estimated at US$50 million in 2009, according to CTR Media.

“Ogilvy will be responsible for Tsingtao’s overall brand strategy, communications planning and core creative work,” said Raymond Tao, president of Ogilvy & Mather Advertising, China. He added that Tsingtao selected Ogilvy as it was also looking for an agency that could help it become a global brand.

“Ogilvy’s leading reputation in the communications industry made us very comfortable with our decision to work together,” commented Liu Manhong, marketing director at Tsingtao Beer. “We are very excited about the partnership and are eager to see the results of our first promotional campaign, which will combine promotion activation, off-line advertising and interactive, digital elements.”

China is the world’s largest beer market, growing 6.7 per cent year-on-year in 2009 to $44.7 billion, according to Euromonitor International. Tsingtao is the second-best selling beer in the market, with an eight per cent share.

The Chinese beer market is fragmented and dominated by a vast number of domestic players. China is home to more than 300 breweries and more than 1,500 beer brands.

Fierce competition, brand clutter and excessive concentration on the low end of the market are creating difficulties for domestic producers.

Manufacturers are increasingly diversifying their brand portfolios, including the introduction of higher-margin premium beers and new products such as an alcohol-free beer .

Nearly every local Chinese beer brewery has foreign investment directly or indirectly. The world’s top 10 beer breweries all invest in China.

In April 2009, Japan’s Asahi Breweries spent $716 million to acquire a 19.74 per cent stake in Tsingtao Brewery by purchasing shares from Anheuser-Busch InBev.