ASIAN MEDIA: China takes centre stage

China is becoming a magnet for Western media owners seeking to reach new audiences. Anna Griffiths speaks with three who have launched successfully.

If you have a brilliant idea for a media launch in China, then consider it carefully. Whether it's a print product or broadcast product, you will find that starting up there is unlike anywhere else in the world. You may need a plentiful supply of Prozac.

But for those who have had the patience to jump through the hoops that the powerful Chinese government has put in place, it has paid dividends and can provide growth opportunities rarely found in other countries.

China's entry into the World Trade Organisation two years ago was a clear sign that the country would open up to Western commercial influences.

The Chinese government has said that, from next year, instead of being forced to act as minority partners in joint ventures with local companies, media owners will be able to majority own their joint ventures, and wholly own them by 2006. This isn't set in stone however, but is merely what the government has agreed.

The experiences of three global media brands launching in China helps to illustrate the unique quality of the market. The consumer magazine group Hearst, which owns The National Magazine Company, and CFO China, which is part of The Economist Group, have already been operating for more than a year and Bloomberg TV is planning its launch in the second half of this year. Each company targets a different market within China.

Hearst first appeared in China with the launch of Cosmopolitan in April 1999. The magazine company had to buy into existing titles in those respective markets in order to gain a licence from the Chinese government. Hearst formed a joint venture with the magazine publisher Trends Communications and the government (which owns the majority stake). Trends Lady, an existing title, was totally revamped but had to keep its name on the cover alongside the Cosmopolitan masthead.

George Green, the president of Hearst International, says: "You have to be flexible to be successful. But we've had no interference in what we've published so far. The magazines we take over are nothing like what they become, from both a content and production point of view."

The magazine portfolio, which now includes Esquire, Good Housekeeping, Harper's Bazaar and Cosmogirl!, is written in Chinese and is entirely geared towards a Chinese audience. The majority of advertising, however, is for global brands such as Estee Lauder, Chanel and Dolce & Gabbana.

Green admits that odd things can happen, such as the Cosmopolitan brand being dropped by the government from the magazine for five months, before reappearing. But this hasn't dented Green's spirit. "It's one of the best things that I've ever done. It's gone beyond our expectations," he enthuses.

The Economist Group decided to launch CFO China - a quarterly title targeting chief financial officers - in March 2002. It avoided setting up a joint venture with the government by importing from Hong Kong, but works with China's Ministry of Commerce which officially imports the title.

With China joining the WTO, The Economist Group felt that the potential for the brand was too great to ignore. Andrew Altmann, CFO China's publisher, explains: "We saw enormous growth opportunities for the CFO brand. Around 70 to 80 per cent of China is state-owned enterprise, so with deregulation you will see great opportunities as companies restructure and become private, and CFO's role grows with that."

The magazine, which is now published six times a year and will become monthly from April 2004, has entirely original content. The majority of advertising though, is by international brands from the banking, IT and services sectors.

Altmann concedes that China is unlike any other market, but adds: "There's a genuine interest to learn from the West in every shape and form. I think China will leapfrog several generations of Western experience and go from 40s communism to present-day capitalism in ten years."

Launching a TV channel, however, can take several years, as broadcasters must talk to the government at length about the channel before being granted broadcast rights. Today there are 22 broadcasters with such rights, and the financial channel Bloomberg TV is set to go on-air later this year through the government's direct-to-home satellite TV platform.

It will broadcast from Asia and so will not have specific content adapted for the Chinese market. It can be broadcast only in English into commercial buildings, foreign compounds and hotels and advertising will be largely from global corporations.

Trevor Fellows, the head of media sales for Asia, Bloomberg TV, says: "It's an interesting and important market for us, but it's early. China is, we think, an economic powerhouse. You have only to look at the balance of trade flows to see the importance of China in the world economy."

THOMAS WONG - Chief Executive, Carat China

What is the most influential brand in China?

Haier, the brand for household white goods. It was the first Chinese brand that exported around the world and it signed a business deal with the biggest retail chain, Wal-Mart, in the US. Haier's success has been used as a case study at Harvard Business School.

What has been the most talked-about campaign this year?

The TV campaign for Ping An Insurance, a local insurance company, and the "Moto" campaign from Motorola. Both were voted by Chinese consumers as the most attractive TV campaigns in 2002. By using appealing visuals, the Ping An TV spot effectively communicated the diversified services of the company. Meanwhile, the Moto TV ad marked the second generation of Motorola TV ad creative in China. It managed to achieve something completely different to the "expected" type of TV spot for mobile brands.

What's the must-see TV show?

The news on CCTV, which is the dominant television station in China. You gain an understanding of what the government's focus is on both a regional and a national level. To be successful in China, it's as important to understand the government as much as you understand your consumers and the marketplace.

Which media personality gets the most column inches?

Charles Zhang, chief executive and one of the founders of Sohu.com, which is the first Chinese internet portal listed on Nasdaq.

What's been the biggest media pitch of the year?

The US$55 million pitch for Ting Hsin International Corp, one of the largest food and beverage manufacturers in China. Carat China beat the incumbent, Dentsu, Optimedia, Maximize and Universal McCann.

Where's the best place to meet clients?

Shanghai Xin Tian Di, a place where east meets west.

What is the biggest single issue facing the media industry in China?

Keen competition leading to irrational reduction in commission and fees.