A foray into the Chinese economy:3
Advertising in China:5
Major Trends & Standards in the Advertising Industry:8
Traditional to Digital:8
Political Risk Analysis:10
Economical Risk Analysis:14
Social & Cultural risk analysis:18
Chinese Advertising Industry: A market study
Subject: “Chinese Advertising Industry”(the Internet phenom): Client: ABC Marketing Inc.
Size: Small-Medium Firm (14 employees)
The Chinese marketing industry shall (for the purpose of this research) consist of advertising/marketing agencies located in China or overseas that provide marketing services to products made and distributed in China. We have chosen not to specify any certain industrial/commercial city as a source of investment as the service of marketing does not rely heavily on geographic location, (being a service of consultation). However, for the purpose of this assignment we shall aim to look at the growing Internet market as a source for and of advertising potential. We have chosen this specific sector of the industry as it in our opinion, poses the most potential for growth. The Chinese advertising industry was valued at 6.5 billion (US dollars) at 2008 and the prospective forecast that it shall have reach a value of 9 billion (US) by 2013(Datamonitor, 2009), makes it a viable prospect for investment by any standard. This investigative report shall aim to uncover the pros and cons of such an investment by a foreign company.
A foray into the Chinese economy:
The Chinese economy is a prime example of rapid growth, following strategic developmental goals to manufacture and export more than any other country in the world. The government’s goals for accession to the economical powerhouses of the world seem to have paid off in leaps and bounds. Over the last 25 years, the country has posted Gross Domestic Product per Annum (GDPA) rates of 8% growth (US-China Business Council, 2008), which is a tremendous achievement, by any standard. With a growth of over $3.42 trillion (USD) of GDP by the year 2007, many analysts do predict that the Chinese economy will overtake US as number one in the world by the next 30-40 years. However, this is not the cause for concern in this particular report and as Samuelson states; an equally interesting question is whether China’s ascension to the top will show cause whereby it “destabilizes the global economy or trigger a contentious competition for scarce raw materials” (Samuelson, 2008, p. 14). While liberalization in China has expanded the economy, many argue that there are greater disparities between rural and urban China. Cities grow in power and prosperity, while the rural outskirts remains considerably poor. The same can be regarded for Chinese incomes’ as per capita income of China (as of 2008) remained at 82nd out of 179 countries (Datamonitor, 2009). With pressures of globalization looming on Chinese political and economic reform, many liberalization processes had been undertaken in recent years. With these reforms, state owned enterprises are allegedly given more independence and authority to make decisions (Economy Watch, 2003). Amongst widespread dubiousness of many academics and scholars, China’s economic growth had sped-up to 8.7% by the end of last year (Jiantang, 2010). Jiantang said that although last year was the most difficult for China’s economy (in this century); government efforts to deal with the posed difficulties had “ended, accelerating slide and began to recover as a whole” (Jiantang, 2010). He considered the amazing recovery possible due to the proactive fiscal policies as well as the moderately flowing monetary policies, which helped stabilize China’s economy at a time of a global financial crisis (Jiantang, 2010). The government had also announced stimulus...