OPINION: LEADER - Promise in China's new entrepreneurs

Chinese garment manufacturer Maoren's tentative steps in creating a brand suggests that it's time for agencies to venture beyond the comforts of Shanghai and Beijing in the hunt for new business.

Led by a street-smart entrepreneur, Wuhan-based Maoren is perhaps typical of a new breed of company emerging across China. They share the same export dreams and commercial goals as domestic giants such as Legend, Haier and TCL. But given their current size, they're hungrier for growth, nimbler and without the management layers that makes decision-making both protracted and painful.

Partly the result of consolidation or on the back of robust growth in their markets of origin, Maoren and companies such as dairy producers Mengniu and Yangtzujiang, the Want Want food group and DibiTel have now reached a market position where they need to figure out the road ahead.

For these companies, the push to build national - if not international - brands is not a luxury but a necessity. Just about every category is groaning from excess capacity and cost-cutting can no longer deliver expected savings, especially in a deflationary environment. The only option in securing growth has to be brand-led.

Looking at the numbers, companies like Maoren represent an exciting prospect even when taken with a pinch of salt. China currently has about 175,000 companies nationwide, nearly half of them are state-owned. But it's reckoned that as many as 36,000 are private companies with clear ownership and a defined scope of business. Discounting companies that are nothing more than property speculators, it's still a sizeable pool and should throw up a number of sound businesses in need of brand-building expertise.

But it's quite another matter snaring and retaining these accounts, especially since the tenure of local client relationships now stand well below the national average. And agencies will have to rethink their "here's a TVC" service mindset.

Second and third-tier players are very much at an emerging phase and have yet to reach a position to spend on TV advertising. What they are looking for is some semblance of order for their fledgeling brands, figuring out how to fit the pieces together, from marketing channel to packaging and POS.

Indeed, agencies will need to jump out of their comfort zone. They may have to dispense with their research crutch, head to the streets to suss out market needs in the same way that the entrepreneurs have been doing if they are to build credibility with this new breed of businessmen. After all, these entrepreneurs have built their companies from scratch, going more by gut instinct rather than focus groups and will expect the same street savviness from their agencies.

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