London-headquartered WPP Group has become the first occidental advertising group to take a stake in a mainland Chinese agency. The move is all the more significant since the shop in question – Shanghai Advertising, one of that nation’s top ten agencies – is state-owned.

Following China’s induction last year into the World Trade Organization, WPP’s Sir Martin Sorrell views the vast country as the world’s fastest-growing ad market. “Within the next ten years, it is expected to become one of the top three [world] markets,” he opines.

The investment builds on an eleven-year-old joint venture between Shanghai and WPP’s Ogilvy & Mather Advertising. But WPP, is not alone in its incursion into China’s advertising hinterland, with a further 25% of Shanghai Advertising acquired by Japanese agency giant Hakuhodo –the globe’s ninth largest ad group with $874.3 million in 2001 gross income. Hakuhodo also has business affiliations with Omnicom’s TBWA.

Effused Sir Martin to AdAge Global: “WPP's collaboration with Shanghai East Best International, Shanghai Advertising and Hakuhodo, has turned Shanghai Advertising into the first company with capital investment from China, Japan and the UK.

“With a unique multinational business background advantage, Shanghai Advertising is confident that it can serve any client whether local, Japanese or Western,” Sorrell hyped.

[Curiously, Sir Martin omitted to tell the Financial Times that WPP was not the only group to take a 25% stake in Shanghai Advertising, contenting himself with the revelation that he has no immediate plans to acquire full ownership. “Quite so,” as Hakuhodo president/ceo Toshio Miyagawa might politely observe.]

Data sourced from: Financial Times and Adage Global; additional content by WARC staff