A delegation of UK agencies and production companies, led by Promote UK, Institute of Practitioners in Advertising (IPA), UK's Advertising Association (AA), and the UK’s Department for International Trade (DIT) is in Shanghai on a mission for the first time.
Their mission to meet Chinese agency peers and to delve into new opportunities for business links coincides with the Shanghai International Advertising Festival (SHIAF) taking place this week. The festival will include a rare full-day UK/China brand forum on Wednesday drumming up the success of campaigns run out of UK-based agencies.
Underpinning the mission is an awareness that China is a high-growth market for consumer products and services. Similarly, stakeholders in the UK advertising industry are touting the stable and wealthy population in the UK and wider Europe that could provide patronage for Chinese brands expanding in Western markets.
"China’s Belt & Road initiative and the UK’s hopes for Brexit are both based on a wish to look beyond national and regional borders and economies to take advantage of growth right across the world," stated Janet Hull, chair of Promote UK and director of marketing strategy of IPA. "We hope to make connections that will bear fruit in and with China for mutual benefit," she added. According to the IPA, a total of 50 agencies in its membership have offices in China.
Independents with no physical China presence yet, such as The Beyond Collective, London Advertising, VCCP, and Feref, will be trying to make themselves known in the market, banking on an AA/IPA/SHIAF partnership that promises more UK exposure at the festival, including British judges, entries and speakers.
Other small shops like Imagination, The Specialist Works, Qumin, Across The Pond, Gain Theory, Freedman are already present in Asia with eyes on the mainland, but are still relatively modest in size, and will welcome the DTI's lobbying and liberalisation efforts. British holding company WPP, for which China is already its third largest market by revenue, needs little help from the governments.
As the post-Brexit transition period approaches, the urgency for the UK to position itself as a centre of excellence for all its exports (not just advertising offerings) is distinct. China's tight control over capital outflows, a new policy in place for 18 months now, has been decreasing the level of investments into the UK, said Louise Cantillon, consul for trade and investment at the British Consulate in Shanghai. Enter Promote UK, an industry group that was launched by the AA in March 2018, that works directly with the DIT to ensure UK advertising takes a central place in the country's Great campaign, meant to maximise the UK brand overseas. Ideally, marketing services will be included in the DIT's foreign direct investment pitch presentations across all sectors of the economy.
"When the UK leaves the European Union on 29 March 2019, we will enter unknown territory, and it remains to be seen what the data [of how the UK exports more advertising services than it imports] will show in the future," wrote Stephen Woodford, chief executive of AA, in a Campaign opinion piece.
In tandem, Chinese businesses have been growing their presence in the UK over the past few years. In Dec 2013 BlueFocus acquired UK-based agency We Are Social backed by a clear strategy to grow revenues ten times. In May 2017, Hylink Digital Services, backed by shareholders Tencent, Sina and Baidu, launched a London hub and appointed a Brit, James Hebbert, as local leader. In May 2018 Tencent’s senior executive vice president Seng Yee Lau signed an Memorandum of Understanding (MOU) with the British Secretary of State for International Trade Liam Fox aiming for cultural collaboration in the createch (creative technology) segment.
"Certainly, Brexit has focussed the UK’s agenda to look at the bigger picture," said Hylink's Hebbert. "However, I feel UK brands and agencies are surprisingly naïve to the China opportunity. You need hyperlocal partners and experts in China as the digital ecosystem and ways of doing business are very different from the West. And in China, it’s all about guanxi (relationships)".
A further step to raise awareness of UK advertising in the China market will happen this September during the China International Advertising Festival (CIAF) where the various UK teams will join the Belt and Road Advertising Cooperation Congress at the festival.