French outdoor advertising group JCDecaux (ticker: JCDXF.pk) has quickly established a presence in China through a number of acquisitions in the first half of 2005. Chairman & Co-CEO Jean-Francois Decaux explained his company's strategy during management's 1H 2005 earnings results conference call:
….JCDecaux achieved two acquisitions in the first half, MediaNation in Continental China, which made JCDecaux the number one outdoor company in China, providing us with high-quality Transport contracts all over the country including the Shanghai and Beijing subways.
The second acquisition was Texon, the number one Street Furniture Company in Hong Kong, operating long-term bus shelter contracts with the three leading Hong Kong bus operators.
Back to China, we won last January, the 15-year Shanghai Airport contract in partnership with the Shanghai Airport authorities. Shanghai Airport is China's largest airport platform with percent of traffic expected to double in 2010 up to roughly 60 million passengers. As you can see, this is a promising future.
We are buying companies in China because it is very difficult to grow organically. We are buying companies with exclusive media franchises. We are not in the Street Furniture market today in China because it is very fragmented and you can't get any exclusivity. But you can expect us to use this Chinese platform to further grow in China, which next year is likely to become the third-largest country in the Group after France and the UK in terms of top line contribution.
(Quotes are from the CCBN StreetEvents transcript.)
- China Media1 Corporation (ticker: CMDA) operates outdoor advertising assets in the Guangzhou airport and Guangzhou subway stations.
- Focus Media (ticker: FMCN) operates an advertising network of flat panel TVs in commercial buildings and in stores throughout China -- but is not planning to operate in subway stations.
- WPP Group (ticker: WPPGY) recently discussed its growth in China's advertising market.