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Branding company takes a positive stance on financial crisis

By Nie Peng (chinadaily.com.cn)
Updated: 2008-10-24 17:12

As governments around the globe are making painful efforts to save their economies from sliding further into a recession, an executive of MetaDesign AG, an LBi Group company, said it plans to expand its operations in China to help multinationals here better position themselves.

This week dozens of Asian and European leaders are putting their heads together in Beijing to discuss how to cope with the global financial chaos, rather than on the earlier planned topics, such as climate change and sustainable development.

But Tobias Phleps, chief operating officer of MetaDesign, on Wednesday told chinadaily.com.cn that his company is increasing its investment in China.

The Berlin-based agency, which calls itself a "branding and corporate identity" company that offers "visual business consultancy", was originally founded in 1990 as a design company. It now offers hybrid services which combine design, advertising and business consultancy. Its Beijing operations started a year ago and the representative office now has Volkswagen and DHL here in China as their clients.

With the belief that more multinationals will need the company's services in gaining ground and more projects will be coming in, Phleps said opening a limited company now becomes a necessity. He said Chinese authorities had given the green light and the limited company would open in Beijing as early as in January and its Beijing representative office would be closed next year.

According to him, the company's Beijing business accounts for less than four percent of the turnover of the company's business in Germany.

"So whatever happens here, if it is very successful or it is not successful at all, it won't harm the company as such," said Phleps.

Moreover, MetaDesign offers services for a wide variety of industries as a way of minimizing risks.

Phleps said his company learned their lesson during the 2001 dotcom disaster when "60 percent, 70 percent of the entire staff at MetaDesign was working interactive."

"MetaDesign was in those days running in the same direction and in the same mistake and in the same trap like everybody else that was going digital," he said. When all of a sudden the market crashed completely, they had to lay off all those people because there were no more projects.

Phleps believed history would not repeat this time, especially for the company's presence in China.

"China now has a growth rate of nine percent and China is actually very concerned that it only has nine percent. Germany's been living with 1.5 percent over the last 10 years. So it's not a big problem in China, not at all. The substances of the companies are still there. I mean if you take Air China, Air China has a huge substance."

China's GDP grew 9.9 percent year-on-year to 20.16 trillion yuan ($2.96 trillion) in the first three quarters of this year and the rate hit a five-year low of 9 percent in the third quarter of this year, the National Bureau of Statistics said on Monday.

And Phleps was positive about the outcome of the financial crisis. "If you look at the crisis, first of all, I think the crisis is not a big crisis."

"It's always a question: how much damage does it do to the entire global economy? And I don't think it'll be too big a thing. The media and journalists, they are writing something else, but the question is if you believe it or not and I don't believe it because personally I'm a very optimistic person."

Phleps said in the backdrop of the current financial crisis competition is more a quality than a price question, and so it is even more important for multinational companies to enhance their brands.

"The market is full of competitors. So how can you differentiate in the market? You can only differentiate in the market by your own brand," he said.

"Price is not the differentiation because one day you'll go to the bottom line. You can't go any cheaper because you won't earn money. That happened to Europe, that happened to the American banks and that's happening to China. It's just a question of time."

Phleps said his company's sales were increasing despite the fact that advertising agencies in Germany have been complaining about declining revenue for the last three years.

Holger Volland, head of the company's brand communications, said: "We have been earning good money for the last few years, so we don't have to rely on credit from the banks. So we don't have a credit crunch at all, which is very good for us."