PEDDLING IN CHINA; MADISON AVENUE STYLE
Boston — They are about the last thing most US visitors to mainland China would look for, expect, or think about, but all of a sudden there they are. Billboards tout goods such as White Cat Soapless Detergent, Coca-Cola, Sanyo products, Winged Tiger Brand Paints.
The very essence of competitive bourgeois capitalistic society, advertisements have arrived in Communist China.
By no stretch of the imagination do they approach in quantity by dizzying flood of ads in the United states. Nonetheless, domestic and foreign ads are appearing in China, a nation of 1 billion potential consumers.
Major New York advertising agencies say the prospects for promoting US consumer goods in China are still mostly in the future, but they are establishing business relationships with a prosperous future in mind.
For their part, the Chinese are interested in learning American advertising techniques.
They want to learn advertising technology and use it "as part of the technological development and modernization of China," said James Farley, Pacific region executive vice-president with McCann Erickson Inc.
"Under such conditions I think one can expect a rapid expansion of advertising, both for domestic and international products," he said.
Alexander Brody, president of Young & Rubicam International, said the potential for US advertising in China is limited for the time being "by the fact that the items for sale by the US in China are in the main heavy machinery and technical items, and not consumer items. China doesn't need those type of products." He said, however, that "in the future, I expect it will be ever increasing."
Some companies are engaged in what Brody calls "image advertising" in China. The products advertised are not available in the stores, but the companies "are advertising against the future potential because they feel there is going to be a market there someday."
How far off is the day when the likes of Revlon ads begin enticing the Chinese populace from billboards and the news media? Walter J. Salmon, a Harvard Business School professor, guessed this might be about five years away.
"But imports could grow to the point that incomes grow. There's obviously a substantial desire for imported goods, since they sell so well in the black market, I'm told. But it's very understandable why the Chinese are wanting to restrain such demand," he said.
Chinese incomes are low and "understandably the willingness of the Chinese government to permit Chinese to buy imported products is so limited" because of scarce foreign-exchange funds, said Salmon.
"We are looking at China now in terms of long-term development," said Wayne Stevens, a spokesman for the J. Walter Thompson Company. "The potential is tremendous" for US advertising in China "in a long-term time frame."
Trade between China and the US is growing all the time. Trade has gone from next to nothing in 1970 to $2.3 billion in 1979. That figure is projected to climb to $3.5 billion this year, and to $10 billion by 1985.
Stevens said, "We have established a number of contracts with the Chinese media.Last November we met with the Shanghai Advertising Corporation [the Chinese agency that handles foreign advertising] and established a direct mutual business relationship with them for future advertising prospects in China."
"To be able to supply the goods. That's the key issue really," said Stevens, who noted there is a lack of distribution and sales networks for products to be potentially advertised.
"No one is going to advertise what they can't sell," Professor Salmon said. "Advertising has to be paid for by sales ultimately.And if you are not going to be allowed to import the merchandise, you are not going to advertise the product."
McCam Erickson's Farley agreed that advertising in China is still "in its initial stages." He said foreign advertising now is mostly confined to areas frequented by foreigners, such as hotels, airports, and main streets in big cities. Foreign ads, however, "are welcome in all publications" and the media. They can even be found in the People's Daily newspaper, the voice of the Chinese Communist Party
McCann Erickson anticipates "handling Coca-Cola in China when it launches its initial advertising thrust," Farley said. Already the company has run a film "identified as a Coca-Cola film on the full network in China," about the Montreal Olympics.
"We are fast developing a business for international clients advertising in China, and starting to handle advertising by the Chinese corporations through advertising agencies in the US and other parts of the world," Farley said.
In Shanghai, a large billboard offers Young & Rubicam's services to help the Chinese promote their products overseas.
The use of US advertising techniques in China to sell domestic items to the Chinese has potential, says Harvard's Salmon.
"There is an increasing opportunity to use that as the Chinese experiment with the free market to regulate production, rather than a central bureaucracy," he said.
One major advertising agency, which requested anonymity, is investigating the possibility of training Chinese in New York and other major US cities in the "American way of advertising."
"We are discussing it, but nothing's firmed up yet," a spokesman said.
Chinese domestic ads have a refreshing, unpolished look, as opposed to their sleek Western counterparts. The names of domestic products -- Snow Lotus Cashmere Sweaters, Dragon-Fly Table Tennis Bats, Snowflake Crystal and Glassware , Blue Sky Superior Toothpaste, Panda Detergent -- are intriguing.
How do the Chinese view this burgeoning phenomenon?
A young guide in Canton said there was no advertising in China before 1976, the year of Mao Tse-tung's death and the downfall of the radical "gang of four," the notorious group that includes Mao's widow, Jiang Qing, which led China for a time and is blamed for many of the country's ills.
"Now there is advertising throughout China," said the guide, adding, "It provides an important service to society. You can get some information from the ads."
"I don't like to see too many advertisements. I'd rather see more trees," said one Chinese woman who lives and works in a major East Coast city. She asked not to be identified.
"And I don't think advertising is a big boom in China," she said. "But we have more advertisements than in years before, definitely more since last year. "It's a fresh thing. It's something that we didn't have even two years ago."
The ads are "a far cry from what you have on the radio in the United States, which I don't like at all because they are too frequent. It's just too much," she said with an obvious exasperation familiar to Westeners who also weary of being bombarded by ads. "It becomes disgusting sometimes. It stops the program in the middle and it's very annoying. This is not happening in China."
She continued: "I think we need some advertising, but not as much as what you need in a Western economy, where those who sell most will get more profits. . . . We need some competition between the factories, but not as great as what you have."