CLOSE-UP: LIVE ISSUE/THE ASIAN ADVERTISING MARKET; Could Seoul’s economic miracle end in disaster?

campaignlive.co.uk, Friday, 21 June 1996 12:00AM

The sheer pace of change in South Korea may cause problems, John Tylee says

The sheer pace of change in South Korea may cause problems, John Tylee

says



Seoul represents the Asian market in microcosm - a high-rise monument to

rampant consumerism and the mass mugging of the environment.



The smog hovering over the capital of South Korea is the legacy of more

than two million Hondas, Daewoos and Hyundais that condemn its eight-

lane highways to perpetual gridlock.



Ozone warnings, accompanied by official pleas to use public transport

and bicycles, are as frequent as they are futile.



Small wonder that delegates arriving for last week’s International

Advertising Association congress greeted the forecast that the number of

cars in Asia will double by the millennium with mixed feelings.



‘When you’re stuck in a traffic jam, the knowledge that the gross

domestic product has risen by 2 per cent isn’t much consolation,’ one

delegate sighed.



South Korea, whose isolationism once earned it the sobriquet of the

Hermit Kingdom, has evolved with the reckless speed of a rollercoaster

into the sixth largest advertising market in the world. Its total

adspend grew by 18.7 per cent in 1995 to dollars 5.7 billion on the back

of a deregulated market and foreign expansion.



Meanwhile, its capital has risen from the ashes of the Korean War as a

city of spectacular ugliness. Paddy fields that once grew rice now

sprout hotels instead, provoking massive physical and social changes.



‘The pace of change hasn’t allowed people to make the mental and

psychological adjustment,’ Neil Drewitt, the media planning director of

Korad Ogilvy and Mather, Korea’s fifth largest agency, says.



South Korea’s dilemma, however, serves only to highlight the problems

and opportunities that prevail across a region of 259 million potential

consumers.



As Vijay Crishna, a former Bombay agency executive and the chairman of

India’s Godrej-GR Appliances, puts it: ‘What lies ahead are major social

pressures and infrastructure problems on the one hand, and huge

marketing opportunities on the other.’



For Western advertisers and agencies, the speed of Asia’s growth is

almost incomprehensible, reflected in a multi-channel TV market twice as

large as the Western European network.



Martin Sorrell’s WPP says it expects its business in the Asia Pacific

region to increase by 15 per cent this year, almost double the

worldwide average.



Michael Bungey, the chairman of Bates Worldwide, marvels at the pace of

Asia’s new-media revolution as signalled by the growing numbers of homes

with PCs.



‘The train is already travelling at 40mph,’ Warren Guthrie, the chairman

of Leo Burnett in Taiwan, observes. ‘But we’re still trying to paint the

wheels.’



Certainly the Asian economy, using Japan as its model, has built up a

powerful head of steam. It is already growing at more than twice the

global rate and is being given further impetus by China, India and

Vietnam as they join the economic elite. The prediction is that by 2010

the region’s economic output will be greater than that of the EU and the

North American free trade area.



High levels of domestic savings, allowing strong investment, is one of

the reasons for Asia’s economic surge. Another is better education,

which has improved the quality of a workforce steadily moving from low

yield agricultural jobs to more productive manufacturing roles.



In addition, increased interdependence in trade and investment between

Asian countries is helping the region’s economy to become self-

generating.



But is the Asian economic miracle durable, or will it falter as the

Soviet economy did in the 50s through a lack of technological progress?

No way, insists Peter Weldon, the vice-president of global marketing and

brand management at A. C. Nielsen in Hong Kong.‘The challenge for us is

to keep up.’



An expanding and prosperous middle class is driving the new Asian

consumerism, Shinji Fukukawa, the chairman of Japan’s Dentsu Institute

for Human Studies, says.



But it’s the spending power of middle class teenagers, the ‘shock

troops’ of Asia’s consumer revolution, that marketers are most

impatient to harness.



Star TV, majority-owned by Rupert Murdoch’s News Corporation, and the

only pan-Asian satellite TV network, has already proved a unifying force

among the young through its Channel V music video service.



Lachlan Murdoch, Star’s vice-chairman, says: ‘What we as broadcasters,

producers and advertisers must do is strengthen our relationship with

young people to understand what influences the styles they adopt, their

purchasing decisions and their leisure time.’



But the biggest mistake advertisers can make is to treat Asia as a huge

homogeneous market. Dr Doo-Hee Lee, of Korea University’s school of

business administration, warns that the collectivism culture is

weakening and consumer trends are linking social classes across Asian

countries.



Nor should it be forgotten that old enmities run deep. FIFA, the

governing body of world soccer, may be about to learn this lesson the

hard way after making South Korea co-host the 2002 World Cup with Japan,

its detested former invader and occupying power.



‘Whoever dreamed that up,’ a Seoul agency executive comments, ‘must be

raving bonkers.’



This article was first published on campaignlive.co.uk

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