CAVELOSSIM: India is on the right side of history and the time has come for the advertising industry to grow, experts said.
The size of the Indian advertising industry is just 0.4 per cent of the country’s GDP, as against almost one per cent in the case of the US, indicating a latent potential for faster growth to drive consumption.
“After growing at such a rapid pace for the last five years, the advertising market dipped by 10 per cent in 2009. It is now time to grow, to develop brands, markets, research and creativity,” said Madison World CEO Sam Balsara, while speaking at the fifth edition of Goafest 2010.
The advertising market is underdeveloped in India compared to many developed and developing countries. India contributes to 17 per cent of the world population but is only 0.7 per cent of the global advertising market, prompting a need for agencies to look for new business models.
Delivering the keynote address for the session ‘Time to grow’, JWT China CEO Tom Doctoroff shared insights into the growth of the advertising industry and its future in China.
Doctoroff pegged the Chinese market at about $30-35 billion with around 500 million consumers. “China could learn a lot from India,” he said. “China is a market which has tremendous growth potential. I see it as one of the largest markets for advertising the world over,” he added.
Explaining the Chinese psyche, Doctoroff said that Chinese like order and the industry was moving from chaos to order with big brands ruling the roost there.
Explaining the nuances of the Chinese mind, he said that the Chinese consumer felt that brands projected stability, sanity and identity status. Chinese believed that stability was a platform for forward movement for the clan rather than the individual. Nationalism in China is a powerful motivator, he revealed.
The Chinese mind perceived brands as badges of success, as status projectors. "China is a market where scale counts, big brands count, being present in every corner of every retail store counts," Doctoroff said. "The future is bright for local branding in China."
He informed that with 625-plus TV channels there was a 250 per cent supply of colour TV which has resulted in a 47 per cent drop in prices over the last three years. Though local branding, which was a new phenomenon here, had risen from just 2 per cent a few years ago to around 45 per cent in the case of JWT China, it was chaotic rather than organised. The local brand message was manufacturing jargon - as if by official state dictates and announcements rather than by consumer driven insights.
Doctoroff presented a case study of one of the local brands, Anta Shoes, handled by JWT China and how it had grown to compete with well known international brands in China from just a $100 million company to a $ 1 billion company in 2009 with projections of $1.5 billion for 2010.
JWT used every possible branding opportunity to convey Anta’s oneness with the Chinese, he informed.
