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BMB’s Mumbai move: what is Cheil planning?

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Interesting interview with Cheil’s Bruce Haines in today’s Media, talking about the plans for UK agency BMB, which the company purchased in 2008.

Haines says the Korean company has decided against launching BMB in Singapore, opting instead for Mumbai as a first port of call for the agency in Asia, with Shanghai and Sydney possible follow-ups:

“We need to invest prudently and to grow new acquisitions in markets where we’d have the best chance. So we changed our minds on Singapore but we could re-visit this.”

“We were also mindful of the way agencies had tried to enter the market here. That’s where our attention moved to Mumbai as our first stop for Asia. We are considering Shanghai and certainly Sydney as a next stop. Those markets themselves are so substantial that I think it will give us a better chance. We are in heavy discussions at the moment.”

Mumbai’s an interesting choice. There’ll certainly be plenty of business flying around, but it will end up a very India-focused office. If you look at micro-networks like BBH and Iris, they’ve set up shop in Singapore first and done a good job at expanding their model. Simply because Singapore is so small, these agencies quickly adopt a multinational outlook.

But Cheil is already in Singapore, and Thailand too now. And this begs the question, is BMB there to ‘fill in the gaps’ in the Cheil network, or is it a separate agency within a holding company model that has to live or die without the crutch of the Samsung account (Cheil is owned by Samsung)? Haines points to the latter in the piece, and I’m pretty sure I know which one the guys at BMB would prefer – their website makes no mention of their link to Cheil at all. Are they ashamed?

The decision to expand BMB (and possibly do the same to Barbarian Group) marks Cheil out from Japan’s Dentsu. Both have traditionally been huge players at home but have not set the world alight overseas – Dentsu has ended up with a patchwork of joint ventures, stakes and even the odd wholly owned overseas agency, but the decisions are still made in Tokyo and none of this has been properly knitted together in a network.

Cheil seems to have decided that to expand overseas, it needs not only to buy overseas firms, but to rely on its acquisitions to do the expansion for it (a recognition that Western companies find it easier to do this, perhaps?)

It’s worth seeing whether BMB’s expansion ends up fitting round Cheil, or whether the company’s bid to recast itself as a holding group will run as far as allowing the two businesses to compete in the same markets. This will tell us a lot about the type of company Cheil really wants to be.

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Written by davidtiltman

February 18, 2010 at 4:06 pm

One Response

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  1. I think Cheil is aware that it will be very hard to export its model and still meet its target of becoming one of the top 10 ad groups in the world. Hence expansion via acquisition.

    Bruce Haines says as much here: http://bit.ly/dizoLb

    At the time, he also said that he was ‘less interested in Singapore’ compared to Mumbai. ‘In the markets where we have both – Cheil will concentrate on experiential and below the line. BMB will concentrate on atl.’

    Arun Sudhaman

    February 18, 2010 at 4:32 pm

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