BlueFocus chief Oscar Zhao outlines global ambitions

Oscar Zhao wants his BlueFocus group, which is expanding out from China with investments in We Are Social and Huntsworth, to go beyond being "the WPP of China" and become a leading global group in digital communications.

Global expansion: BlueFocus chief Oscar Zhao
Global expansion: BlueFocus chief Oscar Zhao

Last week, BlueFocus made headlines after reporting a net profit of $41.9m in 2013 – a stunning 86.3 per cent increase over the previous year. Chairman and CEO Oscar Zhao tells PRWeek Asia’s Amit Jain about his plans for the future.

PRWeek: What factors contributed to this spectacular financial result?
Zhao:
There were three main factors. First was 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, and almost 20 per cent of the Huntsworth Group. We also invested in the Singapore-based Financial PR Group and now own a 55 per cent 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 per cent annually for the past 10 years. I think we can still maintain that growth for the next few years. Third, going public [BlueFocus floated its IPO in 2010] proved to be powerful at the branding level. Every client we win, we do so through a pitch. 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, a lot of clients now come to us.

PRWeek: 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 per cent 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 a global player. We hope that in the next 10 years, 30 per cent 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 20bn [$3bn] by 2022.

PRWeek: 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 expands globally, we aim to be one of the leading communications groups globally in the digital area.

PRWeek: Why are you putting so much emphasis on digital?
Zhao:
I think the marketing communications 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 per cent 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 critical areas where we will develop our team. We will invest in these areas.

PRWeek: 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 communications space to do so systematically, as far as we know. In the past 12 years, we have hired several hundred 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 a technical and marketing background, so we had to look overseas. We have also hired people from Pepsi and Procter & Gamble.

PRWeek: 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 3,500 employees at BlueFocus, including the employee count at firms where BlueFocus has a majority share.

PRWeek: In 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 two companies in the UK. We will also be looking at France and Germany.

PRWeek: 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.

This story originally appeared on the website of PRWeek Asia.

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