Fact: Mainland China is one of the fastest-growing markets for advertising/pr. Actually, for super conglom the WPP Group plc, the country presently accounts for the highest amount of revenue in Asia. That's about £270 million annually! According to WPP’s chief Martin Sorrell, “China is fundamental to the growth of any self-respecting multinational.” Indeed. Maybe "essential" is a better word. Revenues generated in China for WPP totally offset the recent downturn in British and U.S. advertising markets. So wonder Sir Martin can barely contain his enthusiasms.
Consequently, WPP’s strategy is to greatly expand their network there. In a recent interview, Sir Martin said that WPP could double the size of its Chinese operations within five years, adding that Asian business would account for at least 20 percent of the company by 2011. Just last week, the company bought a 49 percent stake in the agency Raynet, accelerating its push into the region's booming economy. With the acquisition of Raynet, WPP now has more than 7,500 people on the ground there.
But it doesn’t appear that Sir Martin planned on slippery oil slicks. The Fanchang Scandal last week sent the business into a scary skid. Bottom line, good cautionary lesson: business, both culturally and legally, is different there.
According to the Shanghai Daily, last week a manager of Fanchang Grease Factory, a cooking-oil plant in eastern China's Zhejiang Province, was arrested for using grease refined from swill, sewage and even recycled industrial oil as raw materials to produce lard. The plant produced more than 100 tons of lard since September that was subsequently sold to retailers across the country. Lab tests have confirmed that the lard contained various toxic pesticides. Authorities in Taizhou City have since shut the factory down.
The implications for WPP and others are chilling. The problem is that the Western imperialists cannot assume that Chinese law and culture is aligned with Western standards. In the case of Fanchang, the country's regulations stipulate that only pure fat of hogs can be used as raw material to produce edible lard. Apparently, the Chinese believe that eating stuff made from swill, sewage and even recycled industrial oil is hazardous to one’s health. Advertising/PR industry analysts agree that this could pose serious problems for Western Image Factories there.