Opinion

Asia’s ad hub – Singapore or Shanghai?

In this guest post, James Welch and Paul Galesloot lock horns over whether Singapore or Shanghai is where the action is for Asian media and marketing.

Singapore skyline at duskHong Kong can no longer claim to be Asia’s regional power hub with much confidence. Brand owners such as Shangri-La and Cathay Pacific and media owners such as Turner and Fox are all that’s left of what was once the region’s most important strategic location.

Only yesterday, Zhang Dejiang, the man in charge of Hong Kong affairs for the Chinese government, said that Hong Kong was losing its competitive edge.

So assuming Hong Kong is out of contention for now, Paul Galesloot is first to argue that China’s commercial capital Shanghai is where the action is.

Shanghai – ‘real Asia’ where West is no longer best

Picture by: Trabajo Propio

“Real Asia” – picture by Trabajo Propio

In a recent study from the World Bank, Singapore and Hong Kong were named the easiest two countries in the world in which to do business (they came first and second, respectively). China came 91st, not only way below the US, UK and Australia, but also Kosovo, Albania and Mongolia. Despite this, I am convinced Shanghai will rapidly become the centre for regional, and probably global business. And for six reasons.

1. Understanding the world’s largest market

Yes, it’s the obvious one. If you want to meet local retailers, distributors who will be able to access 1.3 billion potential consumers, you need to be close to them. You need to understand how you can sell your products in 300+ cities, but also how the vastly different climates influence product choices. For example, did you know there are actually seven distinctive Chinese cuisines – not just “Chinese food”?

2. This is the real Asia

One my friends refers to Singapore as “Asia for beginners”. Singapore might be based in Asia, but it is as Western as New York – an ivory tower in the Asian jungle. Here, you will struggle to really understand the way Asia works.

3. The leaders of the future

There are 100 cities with over a million people and ten cities with over 10 million people in China – how many of these ten can you name? These metropolises are not just filled with factories that made your iPhone. But also clever businessmen, rapidly learning to compete with global brands. They have multi-billion dollar turnovers and experienced, guileful managers. And the market – though slowing down – is still growing at a rate of 8 per cent per year. No wonder China is predicted to have the highest GDP within the decade.

4. Rich cultural background

For a moment, forget about Communist China. Before 1949, China was a culturally rich country. Shanghai was Paris of the East, with a powerful art deco movement influencing architecture and a vibrant art scene. China has a historic background of 5,000 years, which makes Europe look youthful, and America and Australia postively embryonic.

China’s cultural background is currently latent. Art and design are seen as optional luxuries. But as the West disintegrates, it is no longer the aspirational entity it was last millennium. Chinese consumers are now more introspective, looking at their own history, traditions and culture rather than copying the West. Chinese no longer want to be Western. They want to be modern Chinese. ‘West is best’ no longer applies.

I predict there will soon be a big demand for Chinese products, which will rapidly replace the demand for Western products in Asia. Last summer, compare the sales of ready-to-drink milk tea with carbonated soft drinks. Pepsi fell. Coke was stable. RTD milk tea grew 40 per cent.

5. No colonialist past

The Chinese Premier Xi Jinping did not choose London or New York for his first official state visit. He chose Tanzania. He wants to get the message across that China treats all countries equally. In the “last emerging markets”, Europe and the US are remembered as colonial rapists and slave keepers. China comes in with a clean slate.

China’s connections in Africa will become sources of inexpensive labour and a market for Chinese brands, which don’t have the baggage of Western rivals.

6. Economic not military clout

While the US is showing off it’s military prowess to North Korea with the same confidence a 12-year old bullies a toddler, China chooses to use its economic prowess, not military muscle. So while America was risking the lives of its civilians in the Middle East, China bought the second largest goods port in the world – in Greece!

That’s not all…

In China, five-year plans are undisturbed by regular, expensive, time-intensive elections. Its leaders have managed “provinces” with 70-80 million people for eight years before becoming national leaders. 

Shanghai might not be perfect. The air quality does not match that of Singapore. 23 million people means there are many traffic jams. The underground network is already packed during rush hour. Ethical and moral problems around labour laws are aplenty. And there remain many cultural conundrums. But is it much worse than pollution in LA or the tube in London?

When deciding where to place a regional HQ – compared to the little Western town of Singapore – the decision is easy. Shanghai is the future King.

Paul Galesloot is MD and strategy director of design agency Cowan in China

Singapore – ‘Easy Asia’ in the thick of the region

"Easy Asia" - picture by Karen Lim

“Easy Asia” – picture by Karen Lim

There are myriad reasons to have regional HQ in a range of places, but here are the reasons why the HQ of the future should be in Singapore – where frankly it is already. Procter & Gamble, the world’s largest advertiser, is just one example of clients moving their regional power bases to Singapore.

1. Fish where the fish are

Asia has over 4 billion inhabitants. Because there are 1.4bn in China and 1.2bn in India, the key spot for a head office could arguably be in Mumbai or Shanghai. Why not Delhi or Beijing? We seem to have more clients in Mumbai and Shanghai. You could make a good argument for any of these locations. Fish where the fish are, right?

Mumbai is vibrant, exciting and extravagant. The case for Mumbai was made by Maxus, when it announced that its new global chief, Vikram Sakhuja, who was previously country manager for India based in Mumbai, would become its global chief. No relocation package included. That was a first. And a big statement for Maxus and for Mumbai.

Shanghai is buzzing, busy and full of entrepreneurs. It’s where startups start. It’s where businesses grow (we are looking to build our presence here). And it’s a beautiful place; I proposed to my wife there.

But to choose Shanghai over Mumbai – or vice versa – is simply wrong. We need to embrace both. To favour one would be to snub the other.

Now, Singapore is a central hub that allows agencies to service both India and China with ease – and, of course, Southeast Asia, where Indonesia is the next big growth story.

2. Happy wife, happy life

When selling the idea of a new home to your wife and young son who are happy in blissful Sydney, a place renowned for its easy living, you need to convince them of the benefits that come with such a move.

So let’s see… The Indian stand up comic, Papa CJ said on stage at Spikes Asia last year, “in Singapore you drive on the left. In Mumbai we drive on what’s left.” Enough said.

When I was in Shanghai a couple of weeks ago, the skies were blue and a gentle haze added a beautiful hue. The pollution was at a high 180 on the air quality index. Admittedly, it’s not as bad as Beijing has seen. But it doesn’t make it a quick sell to my wife and little boy.

And then we’ve got Singapore, or “Easy Asia.” Now that I live here, I believe that tag is a misnomer. It’s just plain, easy living. Though perhaps I should, I have not needed to learn another language since English is prevalent. And I no longer even need to do the washing up, thanks to my home helper.

3. Safe isn’t boring. It’s just safe. 

Singapore is modern and safe. And though the traffic is getting worse as the plan is for a couple of million more people move here, it’s far easier to get around than in Shanghai. It has fabulous public transport and relatively clearer roads. Oh, and Singapore has the best airport in the world.

It’s unfair to call Singapore boring. Unless, perhaps, if you’re single and don’t have kids, you might have more fun in Shanghai… Or Hong Kong. Singapore is constantly changing, growing. New bars and restaurants are popping up all the time, and there’s an unmistakable buzz about this place.

4. Digital diversity

Today, everyone in the communications business needs to ‘get digital’, no matter what your line of business. And to get digital nowadays means learning and optimising your digital presence in real time. As Bob Arnold, the global head of digital strategy at Kellogg’s says, “digital is knowledge, not a skill.”

We all know by now that there’s nothing homogenous about the online world. Let me give you an example: Everybody has a Facebook account, right? Well, of course not!

Facebook is banned in China. So any Facebook user in China has to have a VPN to log in to see their friends’ updates who live overseas. My point is that a digital expert who knows all the digital channels in China is not going to be a digital expert outside of China. Or at least, it’s not a given.

To ‘get digital’ you need to live and breathe each market. Being in China is good for country managers, but not for regional managers. Living in a smaller, accessible country provides regional managers with a certain neutrality and big-picture approach to the surrounding markets that is difficult to develop from within one large domestic market. To understand your clients’ digital footprint in the entire region, it’s best not to become too ensconced in one market.

5. The thick of it

In Singapore, you can position your business as being in the thick of each market. And with the help of a local team you can grow your business in a way that will work well in each particular, non-homogenous market.

If you’re based in Singapore, you’ll be on the doorstep of a lot of clients’ regional HQs. You’ll have access to every major market in the region. You’ll love living here. And you can oversee all the diverse regional developments with eyes wide open.

Singapore or bust!

James Welch is regional director at WPP’s Media Innovation Group, Asia Pacific. He moved from Sydney to Singapore last year.

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