Over the last 30 years, the market,
the economy and the base of consumers who can afford branded goods
has expanded year by year.
China is now the world's
second-largest economy, according to the IMF, and will become the
world's third-largest advertising market in 2012, according to
WARC. It is the world's largest exporter, the world's largest car
market by annual sales (with massive headroom for even greater
growth, with car ownership at 4% of population) and the world's
largest consumer of iron, copper, coal, zinc and aluminium.
The superlatives also apply to media -
the launch of Simon Cowell's highly successful "Got Talent" TV
format in 2010 created the world's largest TV show with an audience
of more than 500m viewers.
This is a key moment in the country's
evolution. China is now shifting from a market that is dominated by
manufacturing and export into one that has a much stronger internal
consumer market.
By 2015 there will be more than 4m
wealthy households in China (those with an annual HHI of
>$38,000) making it the world's fourth-biggest market for
high-end consumption. Luxury goods consumption in China for 2009
was $9.4bn; making it the number two market behind Japan. However,
Chinese spending on luxury goods is projected to reach $14.6bn and
will overtake Japan by 2014.
That's created a highly competitive
media market, one where ad spend has been growing at double digit
rates for most of the last five years (in 2010 it was 9%) to stand
at $170bn.
The majority of that spend comes from
local brands with multinational brands (such as Olay, L'Oreal,
Pantene, KFC and McDonald's) accounting for 30% of the top 10
advertiser spend and 45% of the top 20 advertiser spend.
We are also seeing evidence of a
divergence in media behaviour between local brands and
multinational brands in China. While local brands in the top 20
were cutting back on CCTV spend, the outside brands have invested
more and more in CCTV - the most expensive TV channel - in order to
build wider coverage.
At the 2011 WFA Global Advertiser
Conference, MediaCom invited delegates to learn more about the
wealth of possibilities in the market and share ideas on how to
unlock its potential.
Read more here.