Determined to be a global digital powerhouse

He is the poster child of China's communications industry. Oscar Zhao, 44, leads the charge of BlueFocus, a homegrown communications outfit that is growing so fast that it begs disbelief.

Oscar Zhao, Chairman and CEO, BlueFocus
Oscar Zhao, Chairman and CEO, BlueFocus

Last week BlueFocus hit headlines after reporting a net profit of $70.6m for 2013—a stunning 86.3% increase over the previous year. Oscar Zhao, Chairman and CEO of BlueFocus tells PRWeek Asia's Amit Jain his plans for the future.

AJ: What factors contributed to this spectacular financial result?

Zhao: There were three main factors. First, is acquisition. Since listing on the Shenzhen stock exchange (in 2010), BlueFocus has moved to acquire various businesses around the world including, most notably, We Are Social – the world’s biggest social media company and almost 20% of the Huntsworth Group. We also invested in the Singapore-based Financial PR Group and now own 55% stake in the firm. Last year we acquired Bojie Media, one of China’s leading TV and cinema advertising agencies. Half of our growth comes from such acquisitions. Second, the market for PR and advertising in China grew very quickly. Our organic growth has averaged 30% annually for the last 10 years. I think we can still maintain that growth for the next few years. Third, going public [BlueFocus floated its Initial Public Offering (IPO) in 2010] proved to be powerful at the branding level. Every client we win, we do so through a pitching process. Now that we are a public company it helps. In China very few companies in the marketing space are public companies. But since we went public and we acquired a leadership position in the market and a lot of clients now come to us.

AJ: Why have you gone on an acquisition spree?

Zhao: We have a clear objective about where we want to take BlueFocus. First, we want to turn it into a digital communications company. We hope that 70% of our revenue will come from digital in the next 10 years. That explains why, for example, we have invested in We Are Social. Second, we want BlueFocus to be global player. We hope that in the next 10 years 30% of our revenue will come from the overseas market. Third, is that we want to grow 10 times in 10 years. That means I would like to see BlueFocus revenues hit RMB 20 billion ($3 billion) by 2022.

AJ: BlueFocus has been called China’s version of WPP. Is that a fair assessment?

Zhao: We used to be the Chinese version of WPP, but as BlueFocus expand globally, we aim to be one of the leading communication groups globally in the digital area.

AJ: Why are you putting so much of emphasis on digital?

Zhao: I think the marketing communication world is changing fast. More and more clients are moving their budget to digital marketing. Therefore BlueFocus should also turn to digital very quickly. In the PR sector last year (in China) 60% of revenues came from digital work. We began pushing our team toward digital marketing since 2007 but I foresee the whole group turning digital in the next few years. Big Data, Mobile, Internet, Video and E-Commerce are the four critical areas where we will develop our team. We will invest in these areas.

AJ: But where can you find the talent to sustain the growth?

Zhao: Talent has become very important to us. In 2003 we started hiring graduates from Universities in Mainland China. At the time, we were the only company in the communication space to do so systematically, as far as we know. In the last 12 years we have hired several hundreds of graduates in the BlueFocus Group. We have also hired Chinese nationals studying or working overseas. Last year we hired a senior manager with 10 years of data mining and research experience into our Big Data team. In China it is difficult to find people who have both technical and marketing background so we had to look overseas. We have also hired people from Pepsi and P&G.

AJ: But good talent is hard to find and even harder to retain. How do you manage to do that?

Zhao: Yes, it is not common for good talent to prefer working for a local company in China. We are one of the very few companies on the Chinese Growth Enterprise Market (a Nasdaq-style board in Shenzhen that lists local fast growing start-up firms) that has offered share options to its employees twice. We have hired talent from our competitors. Some have even come from our clients. Currently, we have about 3500 employees at BlueFocus (figure includes employee count in firms where BlueFocus holds majority share)

AJ: What overseas markets are you looking at investing?

Zhao: We will focus on developed markets. The US is a big priority for us. We have already invested in 2 companies in the UK. We will also be looking at France and Germany.

AJ: What gap do you see in BlueFocus’ capabilities? In other words is there any area of expertise that still needs improving?

Zhao: The core gap is the technology capability, which I believe is crucial in the digital area. We have already invested a lot in it and will keep investing through hires and acquisitions. We hope to be a technology-based company.

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