North Asia in the spotlight: marketing and digital services

Marketing and Digital Services in Asia remains dynamic and is transforming how people consume and behave. Increasingly domestic North Asian executives are looking to enhance their capabilities across borders and for most, the rest of Asia is now a primary focus, fueled by greater prosperity and access.

The Asian market continues to be dominated by some of the largest players in the world and M&A remains a core growth initiative both at home and abroad. Below we have taken a look at three countries where innovation, investment and new ways of thinking and communicating are breaking the traditional communications mould and will no doubt influence how marketing and digital services evolve globally.

China

In China, M&A activity is being driven by “new retail” and the evolution from offline to online marketing. Alibaba is now expected to pay US $9.5 billion to buy the rest of the online food delivery platform Ele.me which will leave two giants in the Chinese online food delivery space; Ele.me and Tencent’s Meituan. Indeed, the rivalry between Alibaba and Tencent is skewing investments in eCommerce in China with Beijing seemingly allowing these tech giants to act as a counterbalance, but the net result is accelerating innovation in the region. For both, their impact goes well beyond China with Tencent running one of the largest and most active investment funds in Asia (they have invested over US $67 billion in over 350 companies since 2012).BlueFocus’ continuing overseas expansion focuses on North America through M&A. Within the next 10 years, they expect revenue from international business to be at least 50% of the group’s total with digital already accounting for a majority of revenue as they pursue intelligent marketing solutions in brand strategy, digital creative production, eCommerce enablement and data analytics.

Japan

While M&A will also continue to help Dentsu fulfill their global vision via DAN, from Japan we expect ADK (#3 Japanese agency) will pursue focused international development, with their WPP shackles loosened and funds available ‘from PE firm Bain Capital’ (who now own 87%). On acquisition, Bain had a clear purpose to broaden and deepen their client relationships with new contemporary service offerings.

South Korea

Recent news from South Korea has been more positive and a change from political and corporate scandals all helped by the recent success of the winter Olympics. The South Korean scene is a unique reflection of their chaebol (family-owned business conglomerate) business model. For Cheil, the largest domestic agency, 2017 saw continuous growth in Europe and the emerging markets of LATAM and India with impressive new business wins outside Samsung and peer recognition for their creative prowess. INNOCEAN are following Cheil’s global footprint and the acquisition in December of David & Goliath, its first since their IPO in 2015, suggests M&A will be deployed to accelerate their global market growth. David & Goliath comes with a very strong pedigree having been KIA’s US agency for nearly 20 years.We expect both Cheil and INNOCEAN to focus their future M&A activities on expanding their creative footprint as well as broadening their service portfolio reflecting how digital technologies are transforming brand activation and engagement.

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