Dentsu Strengthens Global Presence Via Chinese Growth

20 August 2003

Japanese agency giant Dentsu – world number five in 2002, according to Advertising Age – is expanding rapidly in China as it strives to boost its international presence.

Dentsu first opened a Chinese office in 1999. According to a study of tax filings by consultancy R3, the unit grew so rapidly that it became the nation’s third-largest ad agency in 2001 (the latest year for which such figures are available). Revenues, meanwhile, soared from $52 million (€47.0m; £32.9m) in its first year to $278m in 2002, and are expected to be higher still in 2003.

The group has succeeded in winning the Chinese accounts of big multinationals – a feat it has largely failed to match in America and Europe. An example is Nestlé, a client Dentsu also handles in Japan.

Crucially, however, the group has succeeded in picking up plenty of business from Chinese companies, such as computer maker Legend and drinks firm Jianlibao.

This leaves the Japanese firm less dependent on the multinational business than its rival agency groups. Over half its Chinese billings come from local operators, compared with around 40% at WPP Group unit Ogilvy & Mather, despite the latter’s 17-year presence in the country.

China’s ad market was worth over $10 billion last year according to ACNielsen – a rise of over 20% on 2001.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff