Japan’s advertising powerhouse Hakuhodo looks to India in bid to be number one in Asia
Japanese advertising giant Hakuhodo is on a mission to become the number one advertising group in Asia. The Drum spoke with Yasutoshi Hiratsuka, the man responsible for driving expansion, to understand its strategy for growth in the region.
The action never seems to stop in the bustling Japanese market
In an overall recessionary and slow-growth market, Hakuhodo, the Japanese advertising and marketing behemoth, made headlines recently when it announced an acquisition in India.
The agency’s majority stake in independent brand agency group MA&TH Entertainment Network was a significant play revealing an ambition to not only expand its presence in India but also its footprint within the content and production space.
The Mumbai-headquartered agency group, which combines Marching Ants Advertising and Trigger Happy Entertainment (MA&TH), following a merger of the two operations in 2019, provides content creation services for clients such as film distributors, over-the-top (OTT) providers, producers, film production studios, broadcast companies and international brands.
The Drum spoke with Hakuhodo’s general manager for international business strategy Yasutoshi Hiratsuka to learn more about the group’s growth plans in India and across Asia.
Adding up Hakuhodo’s India operations
Hakuhodo first set up operations in India in 2000 after identifying the market as a high-opportunity market. Hakuhodo’s Indian presence includes its digital agency AdGlobal 360 and activation agency PMG, both based in New Delhi.
MA&TH already collaborates with both of these agencies, which was how the acquisition came about. While MA&TH is renowned for content and production, its work in marketing activities have earned it a track record of advertising awards both in India and internationally, including the Cannes Lions Awards.
Amit Chandrra, the co-founder and chief executive officer of MA&TH, says: “Since merging into a single group in 2019, the two constituent agency brands have been working closely to provide a slew of services around the fast-growing entertainment industry in India.” These include marketing strategy building to creative and content production, digital media and digital activation, he adds.
It’s clear to see how the deal is advantageous to both parties. MA&TH wants to gain more traction in the marketing space, while Hakuhodo is looking for more strengths in content and production. The plan is that MA&TH will also collaborate with Hakuhodo’s offices in India, Japan and across Southeast Asia.
Most significantly, the deal provides Hakuhodo with new clients and new opportunities for its existing clients.
Hiratsuka says: “MA&TH has many clients in India’s important industries of OTT and film and also has high video production capabilities. Therefore, it is highly complementary to our business in India.“
MA&TH’s Mumbai presence is also a bonus, providing Hakuhodo with an office in India’s advertising capital as it seeks to expand its own business in India as well as that of its clients.
Hakuhodo’s Asia expansion plans
Hakuhodo is no stranger to mergers and acquisitions, with the agency deploying a strategy of M&A across the region for businesses with “complementary skill sets“. Hakuhodo’s recent purchases include Thailand’s Winter Egency, Taiwan’s Growww Media (the Growww Group) and Singapore headquartered HICG Group for example.
Hiratsuka says: “Hakuhodo is establishing a network to provide services to our clients and focus on Asia, where growth is currently remarkable and is expected to continue in the future.”
At a time when European and American companies are seemingly more cautious and cash-strapped, many Japanese companies like Hakuhodo and Dentsu seem to be on a much better wicket with investable resources.
However, according to Hiratsuka: “Japan’s economic growth cannot be expected to grow significantly and Japanese clients will need to expand their overseas businesses.
”Hakuhodo wants to become the number one group in Asia, where growth is expected, and provide the best service to clients expanding into Asia from the United States and Europe.”
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Hakuhodo’s unique philosophy and its role in global expansion
Central to Hakuhodo’s growth is its unique philosophy, ‘Sei-katsu-sha Thinking’, which aims to understand people not only in terms of consumption but also from the perspective of their lives in general, shares Hiratsuka. These learnings and insights are then applied to strategies and communication content planning.
The company believes that this way of thinking can be applied to the whole world, adds Hiratsuka. Accordingly, this philosophy is the underpinning belief system with which the behemoth agency supports its clients around the world and enriches the lives of people in each country.
The philosophy is a central pillar to Hakuhodo’s global growth strategy along with strong partnerships, says Hiratsuka.
”Our two strategies are to provide excellent marketing services to those Japanese clients to gain the support of Sei-katsu-sha in the countries where they expand, and to support the growth of local/regional/global clients in each country by providing marketing expertise and digital-related technologies we developed in Japan.
”Another important thing is to have partners you can trust. Our expansion in each country is driven by the introductions and judging expertise of these partners. Great friends bring new great friends. When you have a group of people who believe in each other, it is easy to solve difficult problems.”