Dystopian Shanghai

Why are there no brands from China that leverage digital channels to the fullest and do so globally? Moreso than the Internet in China being insular (e.g., Weibo instead of Twitter and Baidu instead of Google) and censored (e.g., Facebook, YouTube, and others are blocked), digital marketing agencies (and in-house departments) lack talent.

Digital marketing is becoming more granular and specialist-driven. The number of channels and tactics have grown and most agencies don’t have the expertise to cover all the angles. Chinese companies tend to hire agencies that have the cultural know-how and soft skills of local business etiquette, but which often results in mediocre performance. “CMOs in Asia are not used to convincing the group CEO to take risks in marketing spend,” observed Mark Phibbs, senior director marketing Asia-Pacific at Adobe Systems in a survey of senior marketers in Asia-Pacific. There is simply not enough good work being done by such agencies to evolving, best-in-class standards and their models are simply too slow, inefficient, inflexible and error prone to maintain the current pace of business. Some hide their inefficiencies behind the largesse of their outsourcing contracts, others stay in business thanks to “guanxi”, each masquerades as up to date with the speed of innovation coming out of hot spots like Silicon Valley and New York City, but this status quo does not lead China forward in innovation.

Most vexing, China is doing nothing to increase the already low supply of digital talent. Unlike Japan, whose biggest advertising agency, Dentsu, recently bought London-based Aegis to penetrate new markets and gain much-needed expertise in digital marketing, China has no homegrown agency that’s as big or cash-rich as Dentsu to go on an acquisition spree nor does China even offer digital marketing courses in its universities that would provide a homegrown solution to achieving digital marketing dominance.

The only means of dealing with this difficult situation, in addition to putting in place the prerequisite institutions and infrastructure for tomorrow, is to ensure that top talent want to live and work in China today. Foreign talent not only fills high-skill gaps in the labor market but foreigners bring knowledge and expertise gained from experience in their home countries which spill over to the locals, making them strive for higher standards, and making China as a whole more competitive.

Until then, as Lee Kuan Yew, Minister Mentor of Singapore, a country very welcoming to foreign talent, once observed to Harvard Professor Joseph S. Nye, “China can draw on a talent pool of 1.3 billion people, but the US can draw on the world’s seven billion, and can recombine them in a diverse culture that enhances creativity in a way that ethnic Han nationalism cannot.”