WPP CEO Sees Global Prominence for Chinese Brands

Chinese companies are looking at a promising future where domestic brands will become famous internationally, according to the chief executive of the world's largest advertising company.

In a recent interview with Xinhua, Sir Martin Sorrell, chief executive of WPP (Wire & Plastic Products Group), said he believes that China's great size offers its domestic business a big advantage, which can be used as a platform to grow their firms into global brands.

Sorrell is about to embark on a two-week trip to China in which he will discuss with his top executives the strategy of his firm's US$1.5-billion business in the country.

"In China you have 1.3 billion people. It's four or five times bigger than America. So, if you think about it from a Chinese company's point of view, and if I was running a Chinese company I would want to make sure that I had done everything I could in China before expanding abroad," he said.

Sorrell, whose firm employs 165,000 people in 110 countries, said a large and strong domestic market was a good base for international growth, and pointed to the advantages that the United States and Japan have in the global economy.

He also said that people worldwide are going to see more and more of global Chinese brands.

No hard landing

"What we want to do is to increase our relationships with -- I call them local Chinese companies but they are big companies -- not only to build their businesses in China but to build them outside China because China is becoming a more and more important force on the world stage," he said.

Sorrell believes China's strength lies in its domestic economy, saying that its 12th Five-year plan highlights fewer savings and more consumption.

The WPP was "very excited about the growth opportunities" and "are very bullish on China," he said, adding that "We think the new leadership is going to make a big difference."

Sorrell said he does not believe there would be a 'hard landing' as the Chinese economy focuses less on growth through exports than on a greater exploitation of the potential of its domestic markets.

"We don't think there will be a hard landing in China, it is a soft landing...The data we are getting is good data, and it is good data in terms of performance," he said.

He also said that his business is focused on exploring the potential buying power of the new middle class.

Faster growth rate

Sorrell said his business, which had first been in the Chinese market in the late 1980s, plans to expand its presence in China.

It currently turns over US$1.5 billion worth of business each year, with a workforce of 15,000 to 16,000.

"We want to grow that at twice the GDP growth rate -- so the growth rate is 7.5 percent which is the target for the 12th Five-Year plan. We want to grow somewhere around 10-15 percent," Sorrell said.

He also said that the WPP seeks to acquire domestic Chinese businesses, and pointed to the acquisition this month of Sinotrust, which specializes in the research of the automotive industry.

Sorrell's trip to China will take him to a number of cities including Beijing, Qingdao, Shenzhen, Hangzhou, Nanjing, Shanghai and Chengdu.

He said his firm's China strategy would be focused on all big cities, not just the giant, well-known cities.

He said people often forget there was a big hinterland to China, adding that despite many cities in China are not as big as Shanghai or Beijing, yet they "are big."

The WPP, which has now been operating in 80 cities in China already, seeks to do business in all cities where there are significant population concentrations, Sorrell said.