As WPP Group Plc. CEO Sir Martin Sorrell continues to take centrestage this week in India’s media and advertising world, Mint is bringing a three-part, first person account of his views on what will drive the world of advertising and marketing services in 2007 and beyond.
On Friday, Sir Martin wrote about globalization and Americanization. Today, he focuses on China and India. Monday’s Mint will carry other conclusions from his account, dubbed The Advertising & Marketing Services Industry: China and the Internet. Edited excerpts:
China and India: a different world
It is difficult for those of us in the West to comprehend the scale of Asia Pacific’s potential development. China is not just one country; it consists of more than 30 provinces, with so many languages and dialects that Mao Tse Tung needed an interpreter. The population may well be closer to 1.5 billion rather than 1.3 billion. The Chinese government seems to consistently underestimate its statistics, like those for GDP growth. But it is still equivalent to four or five Americas.
It is true also that currently only 150-200 million Chinese can afford the goods and services we are trying to market to them. However, this is already equivalent to over half an America and this is a dynamic situation, one that will change rapidly in the coming years. Already, there are almost 500 million mobile phone subscribers in China, 300 million of which subscribe to one company, China Mobile (one of the top five most valuable world brands)—that’s equal to the total 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 they bill themselves as the world’s fastest-growing democracy.
World Watch: India, Sir Martin Sorrrell says, seems to have been stimulated into rapid growth, driven perhaps by neighbourhood envy and the Chinese model of state-directed capitalism
Do not underestimate the potential of the region as rapprochement spreads even to cricket, with the Indian-Pakistani test and one-day series representing as important a political, economic and social signal as the Beijing Olympics. Or look at the dog-fight for Hutchison Essar Ltd, which Vodafone won, in a market growing at five million subscribers per month, just like China.
Asia Pacific will dominate again. This really is back to the future. In 1820, China and India generated around 49% of worldwide GDP. In the early 19th century, Meissen and Wedgwood were dismantling the high-quality, high-price Chinese porcelain industry, with similar quality but low priced porcelain. It is the exact reverse today. In 2025, these two countries are forecast to be headed for the same level of world GDP, having bottomed out at 8% in 1973.