Rapid economic growth in Asean and India is driving the advertising agency Chuo Senko (Thailand) Plc to expand to attract a broader reach of international clients who are looking to grow in the region.
At the same time, it is transforming itself from a mainly Japanese advertising agency to an Asian one to reflect its new mission.
Japanese companies and others from around the world, particularly Europe and the United States, are still the main target for Chuo Senko. The Bangkok-based company recently set up three new companies — Ad-Asia in Singapore, Chuo Senko (Myanmar) and Ad-Asia Myanmar — to help it pursue its new goals.
Shuji Okawa, president and CEO, said many international companies now want to have a greater presence in the growth markets of Asia. The agency’s existing Japanese clients are now heading to Myanmar, and advertising will be a key to help them get close to consumers.
Chuo Senko (Thailand) holds approximately 80% of the new Chuo Senko (Myanmar) and Ad-Asia Myanmar businesses. Its partners are other Japanese advertising agencies.
Chuo Senko’s Japanese clients including Honda and Rohto Pharmaceutical are examples of Japanese companies that are looking to enlarge their business in Myanmar. The company is approaching more Japanese companies in the home electrical appliance and financial sectors.
Its services will cover a broader range, including commercial advertising, billboards, sales promotion, marketing events and market surveys.
"Myanmar is a new market for us," said Mr Okawa, who joined Chuo Senko last August after 37 years at the Japanese agency Hakuhodo. "We don’t know which marketing solution will suit Myanmar consumers the best. So, we have to do marketing surveys, enabling us to design the marketing tactics more easily."
He said the competition in the advertising business in Myanmar would be tougher in the near future as other agencies are trying to set up businesses there. He believes that Chuo Senko is the first Japanese advertising agency to have entered Myanmar.
The company is also setting up a 51:49 joint venture in New Delhi this month, partnering with DDB Mudra, one of the biggest advertising agencies in India with 30 offices throughout the country.
"India is very vast. It is difficult to cover the whole country. DDB Mudra has networks nationwide, which can help us do business in India," said Mr Okawa.
Chuo Senko is already active in five Asean countries: Thailand, Indonesia, Vietnam, Malaysia and Cambodia. After Myanmar and India, it will seek opportunities in other countries such as Bangladesh.
Mr Okawa added that Chuo Senko was now positioning itself as an Asian agency, since it no longer has headquarters in Japan. Chuo Senko Advertising in Japan, the major shareholder of Chuo Senko (Thailand), filed for bankruptcy in 2010. Since then, it has moved its headquarters to Bangkok.
To grow more in Asean and India, the company has to focus on international companies, too. Thus, it set up Ad-Asia in Singapore to tap those companies.
To serve Japanese customers, Chuo Senko recently allied with Daiko Advertising Inc, the fourth biggest agency in Japan, to help each other. Daiko can introduce new Japanese companies to Chuo Senko, while the Thai-based agency can bring Asean companies to Daiko.
"We expect to increase new clients and billings via this alliance," he said.
Chuo Senko (Thailand) will celebrate its 50th anniversary in 2013. Given the fact that the advertising business in Thailand is quite saturated, Chuo Senko is setting up other businesses to improve growth in the country. For example, it is looking to start a business that helps design showrooms for customers to help them do sales promotion or marketing events.
Mr Okawa targets billings this year from all five countries to reach 20 billion baht. Thailand is the largest contributor with expected billings of 12 billion, followed by Indonesia at 500 million baht, and Vietnam 300 million. Billings in 2013 are expected to grow by 20% from 2012, and in 2014 they are expected to be 30% higher than in 2012.
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- Writer: Nalin Viboonchart