They’re Hiring, and a Few Even Manage Warehousing For Clients

A Shanghai warehouse of Chinese e-commerce company JD.com Credit: Tomohiro Ohsumi/Bloomberg

This week, Saatchi & Saatchi China announced it was bringing on 48 hires from a local e-commerce services provider called Bysoft. It’s the latest example of how international agencies are adjusting their offer to cater to China’s e-commerce boom.

In China, now the world’s largest e-commerce market, almost anything can be bought online – from exotic imported produce to cheap locally made clothing, from iPhones to Cadillacs. Online purchases are a greater percentage of retail in China than anywhere else. This year 15.9% of retail will be via digital, according to eMarketer. In the U.S. that figure is just 7.1%.

Given China’s rapid embrace of e-commerce, “marketers and agencies are having to adapt at warp speed to build capabilities and potential capabilities in this area,” said Greg Paull, Hong Kong-based principal of agency-management consultancy R3 Worldwide.

Greg Paull, Principal of R3 Worldwide

Agencies are trying different tactics. WPP China CEO Bessie Lee told an investors’ conference last week that two WPP companies, Kuvera and Salmon, were doing “a very hard-core e-commerce service. What does that mean? It means managing the e-commerce storefront for our clients, finding warehousing, managing warehousing, finding logistics partners for our clients, doing CRM (and) customer service for our clients for their online stores.” The agencies do marketing but are also distributors and store managers for clients, Ms. Lee said, adding: “So this is new money that we probably never had before.”

Like many agencies, Dentsu’s Carat is expanding its e-commerce team. When Chinese internet giant Alibaba hosted its massive one-day online shopfest on Nov. 11, logging $14.3 billion in merchandise sales, Carat had a 28-hour war room for clients including Mondelez, handling everything from media optimization to brand-shop management to product replenishment to competitor tracking. China’s e-commerce boom also factored into a new partnership between Dentsu’s Carat, Mondelez and internet giant Tencent to work together on data, research and content.

The company that Publicis Groupe-owned’ Saatchi hired staff from, Bysoft, has cast itself as a one-stop solution that includes digital marketing and operations, with a warehouse and fulfillment system for brands, and a client list including Adidas and Durex. Two of the hires were Cyril Drouin, Bysoft’s CEO, who takes charge of Saatchi’s China e-commerce strategy, and Christine Wang, Bysoft’s managing director. (Saatchi says it wasn’t an acquisition of Bysoft, but a recruitment of talent from the company.)

Bysoft, founded in 2003, is one of dozens of standalone e-commerce agencies to pop up in China; many promise brands a range of services from marketing to operations, which is attractive to some brands. Alibaba-backed Baozun handles digital marketing, store operations, customer services and warehousing and has clients including Nike and Burberry. It had a $110 million initial public offering on the Nasdaq this year.

The Chinese e-commerce market is fast-changing and complex, with different platforms than elsewhere – not only Alibaba’s marketplaces, but also online superstore JD.com and many verticals. Many brands are still figuring out their strategy, and the big question is how agencies will eventually fit into the landscape.

“Are marketers going to push their business into a standalone e-commerce agency or into the existing creative digital agencies?” Mr. Paull asked. The argument in creative agencies’ favor is that “in the end an e-commerce customer is still a customer, and the work needs to be treated with same brand integrity you would treat any other work.”

Source: Adage