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Here - and here to stay

Understandably, the West has difficulty grasping the scale and complexity of Asia Pacific’s potential development. China is, after all, not just one country; it consists of more than 30 provinces, with so many languages and dialects that even Mao Tse Tung had to take an interpreter when travelling. Incidentally, the population may well be closer to 1.5 billion rather than 1.3 billion. The Chinese government consistently seems to underestimate its statistics, like those for GDP growth, but, whatever the true figure, it is still equivalent to four or five Americas. Likewise, India’s 1.2 billion plus population covers 27 states.

Of course, only 200-300 million Chinese can currently afford the goods and services being marketed to them, but even this is already almost equivalent to all of America and is a dynamic situation, one that will change rapidly in the coming years. There are over 700 million mobile phone subscribers in China. Of those, over 500 million subscribe to one company, China Mobile (one of the top 10 most valuable world brands) – equivalent to more than one and a half times the population of the US.

Furthermore, India, itself equivalent to three to four Americas, seems to have been stimulated into more rapid growth, driven perhaps by neighbourhood envy and the Chinese model of state-directed capitalism – although India bills itself as the world’s fastest-growing democracy. Look at the dogfight for the Indian phone operator Hutchison Essar, which Vodafone won in a market growing now by 15 million subscribers a month, even more than China at eight million a month. There are now 540 million subscribers, with Airtel having 124 million and Reliance and Vodafone having around 100 million subscribers each.

This really is back to the future. In 1820, China and India generated around 49% of worldwide GDP. But by the early 19th century, Meissen and Wedgwood were undermining the high-quality, high-price Chinese porcelain industry with similar quality, but cheaper products. It is the exact reverse today. China and India are heading for the same share of world GDP in 2025 that they had in the 18th century, having bottomed out at 8% in 1973. China’s development has been rapid and will continue, but not without bumps. The government is conscious of overheating, and an imbalance in rates of development between the coast and the hinterland. There has, it is true, been a slowdown in 2008 and 2009, but the recent Party Congress has set an 8% target for GNP growth in 2010. Fears of social unrest will push the government to implement more fiscal stimulus if necessary.

Evidence of China’s arrival on the world stage is everywhere – its confidence at Gordon Brown’s G20 summit last year, President Obama’s low bows to the Chinese leadership and, most visibly, the Beijing Olympics. Few self-respecting multinational companies bent on expanding into China or national companies seeking to grow inside or outside China missed out on the branding opportunity presented by Beijing 2008. The Chinese government committed $45 billion of investment around the Games, in contrast to London’s $14 billion for 2012. Beijing was a whopper but it will not end there. The Municipality of Shanghai is investing $3 billion in Expo 2010 and there will be the Asian Games, in Guangzhou, this year.

Watch out for increasingly subtle Chinese military and economic influence, too. Take the recent economic contact with Fidel Castro in Cuba to counterbalance Taiwanese tensions. Or Chinese investment in Galileo’s GPS systems, which drew a coruscating response from the Pentagon. Equally, Beijing will not be prepared to rely on America to defend its vital and growing energy supply interests in the Middle East and Russia, as its recent energy deal with Russia showed. It is busily building trade bridges throughout the oil- and energy-producing regions of the world, particularly Latin America and Africa.

It is in Africa that China is changing trade relations, with more than 800,000 Chinese reportedly participating in projects there. Increasingly, Africa is the continent of opportunity, rather than war, disease and poverty. President Muammar Gaddafi’s volte face has energised North Africa and Egypt, and China’s focus has drawn the attention of Western governments seeking to curry favour, too. We at WPP have invested in Smollan and The Jupiter Drawing Room in South Africa and Scangroup in Central and North Africa. In Africa, as well as China, sport plays a symbolic role. The 2010 FIFA World Cup in South Africa is an iconic event for the African continent and one in which our agencies dominate.

There is another challenger to American dominance – the Muslim world. Already, Muslims number 1.6 billion people or a quarter of the world’s population. By 2020, they will account for 2.1 billion or approximately 30% of the world’s projected population. The recent struggles in Afghanistan and Iraq and continued tension with Iran, really only continue the 1950s Suez conflict, the oil crisis of the 1970s and the invasion of Kuwait in the 1990s.

Westerners have made little attempt to understand the Islamic mind and assume that Muslims share their value systems. This is wrong-headed and short-sighted. Muslims are different and it will be increasingly necessary to make a serious and sincere attempt to understand them – something President Obama’s administration clearly grasps. WPP will be announcing new Muslim marketing initiatives at the Muslim conference in Kuala Lumpur in May 2010.

BrandZ™ Top 20 risers 2010 Year-on-year brand value growth
Rank	brand	$m Brand value	% Brand value growth
1	Samsung	11,351	80%
2	Baidu	9,356	62%
3	MasterCard	11,659	57%
4	Next	2,569	54%
5	Visa	24,883	52%
6	HP	39,717	48%
7	Verizon Wireless	24,675	39%
8	Apple	83,153	32%
9	IBM	86,383	30%
10	Amazon	27,459	29%
11	Goldman Sachs	9,283	25%
12	HSBC	23,408	23%
13	O2	10,593	23%
14	Skol	2,722	22%
15	Corona	5,196	21%
16	Evian	907	21%
17	Budweiser	15,991	20%
18	T-Mobile	13,010	20%
19	Barclays	8,383	20%
20	VW	6,994	20%

Source: Millward Brown Optimor (including data from BrandZ, Datamonitor and Bloomberg)

BrandZ™ Most Powerful Brands 2010 Top 20 global brands by value $m
Rank	Ranking change	Brand	Brand value 2010	Brand value 2009	Brand value 2008	% chg 10 vs. 09	% chg 09 vs. 08
1	=	Google	114,260	100,039	86,057	14%	16%
2	2	IBM	86,383	66,622	55,335	30%	20%
3	3	Apple	83,153	63,113	55,206	32%	14%
4	(2)	Microsoft	76,344	76,249	70,887	0%	8%
5	(2)	Coca-Cola*	67,983	67,625	58,208	1%	16%
6	(1)	McDonald’s	66,005	66,575	49,499	-1%	34%
7	3	Marlboro	57,047	49,460	37,324	15%	33%
8	(1)	China Mobile	52,616	61,283	57,225	-14%	7%
9	(1)	General Electric	45,054	59,793	71,379	-25%	-16%
10	(1)	Vodafone	44,404	53,727	36,962	-17%	45%
11	1	ICBC	43,927	38,056	28,004	15%	36%
12	5	HP	39,717	26,745	29,278	48%	-9%
13	(2)	Walmart	39,421	41,083	34,547	-4%	19%
14	2	BlackBerry	30,708	27,478	13,734	12%	100%
15	11	Amazon	27,459	21,294	11,511	29%	85%
16	(1)	UPS	26,492	27,842	30,492	-5%	-9%
17	4	Tesco	25,741	22,938	23,208	12%	-1%
18	18	Visa	24,883	16,353	n/a	52%	n/a
19	6	Oracle	24,817	21,438	22,904	16%	-6%
20	14	Verizon Wireless	24,675	17,713	19,202	39%	-8%

Source: Millward Brown Optimor (including data from BrandZ, Datamonitor and Bloomberg)

*

Value includes Lites, Diets and Zero.

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