HDM plans ahead, looks to make inroads to vast mainland China consumer market.

HDM plans ahead, looks to make inroads to vast mainland China consumer market

With the reunification of Germany and an emerging market-driven economy in the Soviet Union, communist China is on the back burner for most world marketers.

But not for Candy Wong, general manager of HDM Los Angeles, a truly international advertising agency that is one of the few to establish a beachhead on mainland China instead of capitalist Hong Kong. Hong Kong will again become part of the Chinese empire in 1997, when Britain's lease on the colony expires. China will inherit the lease on Hong Kong's port from Britain in 1997.

"That's still a long way off, certainly, but it could mean a tremendous change for China, a giant stepping stone if it's used properly," Wong said. "But if the communists squeeze too hard . . . well, the bubble could be broken."

Curiously, considering the large Chinese population in Los Angeles, HDM has not concentrated on reaching that market here, instead handling tourism and trade matters from its New York office. But it has moved in the other direction, trying to bring western marketing techniques to China.

It's a market of tremendous potential, with its population of more than a billion, yet infrastructure limitations severely limit it as a marketing center.

Television is dominated by a single state-controlled network, CCTV, although there are provincial and local stations. Wong said the programming is primarily educational and propagandist. An experiment with some American television programs, such as Falcon Crest, proved to be a ratings success, she said, and thus might be increased.

Print media is even more restricted. The national publication, People's Daily, is limited to eight pages because of paper shortage. Local papers are limited in space for the same reason.

"As a result, you need to make reservations for an advertisement a couple of months in advance of publication," says Wong.

Yet an agency can get around this. Often it's a matter of who you know. "It always seems that somebody's uncle or cousin is in charge some place," Wong said. "So you have to work with local people. They become your basis of negotiation in the country, getting doors opened for you."

HDM opened its office in Beijing four years ago and recently expanded to Shanghai. Other agencies, including Japanese, that have established offices in China have set them up in Hong Kong, she said. But there are rumors that another large agency soon will open an office on the mainland.

HDM's office is a joint venture with the Chinese and, as a result, employs two representatives from the government's Economic Relations and Trade office. Wong said the company's philosophy is build with local people. There is a surplus of talent among Chinese students of marketing and business, she noted.

It isn't easy right now to make money as a marketer in China. "It's downright difficult," Wong said. "Advertising budgets are small and media is limited. But we think it will be increasing with the trend to westernization in general."

The market for magazines in China is one of great potential, she added, still vastly underdeveloped. Start-up magazines come and go, reflecting the shortage of paper, high costs and circulation difficulties due to infrastructure problems. As for foreign magazines desiring to penetrate the vastness of the nation, she warned about red tape and censorship.

"Get ready to be flexible if you're planning to transplant yourself there," she said. "In the publishing business in China, as in so many other things, there seems always to be an excuse not to get something done."

The words that describe China, however, seem to be promise and potential.

"It's been a closed society for so very long," Wong said. "There has been an oppressed feeling in learning and sharing. But that seems to be changing. It may have something to do with Hong Kong; I really don't know. But when I visited China last, about a month or so ago, I found that life was really moving ahead."

She took her father, who had left China 60 years ago. Wong was born in America, of a father born in China and a Chinese-Canadian mother.

HDM is a subsidiary of the big U.S. agency Young and Rubicam in a joint venture with a Japanese and European agency, its initials standing for Havas, Demtsu, Marsteller. Demsu is a Tokyo agency; Havas is owned by a large European holding company, Eurocom.

The agency has 45 offices and, Wong said, ranks as the fastest growing $1 billion plus (billings) agency in America.

Reflecting the importance of Los Angeles' Chinese population, a local television station, KSCI, this week begins a live, primetime broadcast in Mandarin Chinese. The half-hour broadcast starts at 7:30 p.m.

Anchor is Joseph Jinn, who worked as a reporter for the Chinese Daily News and is a co-producer and co-host of a weekly radio talk show. He also hosted a news radio program in China and worked in Taipei, Taiwan as a reporter for the Central News Agency, the Chinese wire service equivalent of Associated Press or United Press International.