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CEO's West-East-West travels

2014-04-24 09:52 China Daily Web Editor: qindexing
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A customer chooses sunglasses in a department store in Fuyang, Anhui province. Consumers in China's second- and third-tier cities are now the primary drivers of consumption growth. Wang Biao / For China Daily

A customer chooses sunglasses in a department store in Fuyang, Anhui province. Consumers in China's second- and third-tier cities are now the primary drivers of consumption growth. Wang Biao / For China Daily

Barns' US-China career path reflects the shifting sands of a globalized market

From West to East, then East to West; this is how globalization is shifting, according to Nielsen Holdings NV's global Chief Executive Officer Mitch Barns.

The process reflects Barns' career path and changes to Nielsen's China business portfolio.

Barns became CEO in January, heading a leading global provider of information and insights into what consumers watch and buy.

He was elevated from Nielsen's US media business where, from 2011 to 2013, he oversaw the development of its analytics practice and integrated its TV and digital groups.

From 2008 to 2011, Barns was president of Nielsen's Greater China business where he guided it to become a fast-growing and stand-alone region for the company.

His Chinese experience, Barns said, enables him to better understand the country's role and allows him see the world from both West - East and East-West perspectives. It is very valuable in his current position.

The company is striving to develop more local clients, especially as increasing numbers of Chinese companies are accelerating overseas expansion.

"Our business with local clients grew strongly - double digits - last year, significantly higher than multinational companies," Barns told China Daily. For him, this is a perfect example on how globalization's moving.

It's also true with Nielsen's new business model centered on "four practices" - which it first carried out in Southeast Asia and expanded globally, including to the US where the company is based.

The four practices, Barns said, are: identify consumers; innovate based on clients' needs; improve marketing; optimize business performance.

Nielsen has strong expectations for its business and profitability in China this year, despite slow growth in the economy, Barns said.

The World Bank lowered in March its forecast for China's economic growth this year to 7.6 percent from 7.7 percent, taking into account industrial output and export data in the first two months.

"Our business is not so closely correlated with the GDP growth," Barns said. "As the market is largely under-penetrated, we still have a huge growth potential, especially when China is undergoing an economic restructuring."

China is shifting its economy to being consumer - rather than investment-driven, and Nielsen's business is highly focused on consumption.

Statistics show the consumer sector accounted for 35 percent of China's GDP in 2012. The global average was 65 percent, pointing to the country's huge growth potential.

Chinese household savings rate as a percentage of disposable income almost doubled from about 16 percent in 1990 to more than 30 percent two decades later.

"Challenging times, in fact, will provide us more opportunities as our clients need to know more about their customers to improve their business," said Barns.

Nielsen will make greater efforts to explore China's e-commerce sector and develop more local customers.

"With the fast growth of China's e-commerce sector, we will seek cooperation with all major players in this field," Barns said.

China's government has called for online companies to boost activity and be a key driver of domestic consumption. Potentially, it's a great opportunity for the sector.

"Today, no marketer's approach to China will be complete without a robust e-commerce strategy," Barns said. "Crucial here is the distinct openness we see from Chinese consumers towards mobile payments."

Nielsen will put more effort into developing local customers, especially in the finance and auto sectors. Clients in these areas remain by far Nielsen's largest revenue source.

Meanwhile, after sealing two big merger and acquisition deals last year in US, Nielsen is seeking such opportunities in emerging markets, like China, Barns said.

It agreed in November to buy New York-based Harris Interactive Inc for nearly $116 million. Harris will be woven into Nielsen's "buy" business segment, providing information to manufacturers and retailers.

In September, Nielsen completed its acquisition of Arbitron Inc, an international media and marketing research firm. It has been rebranded as Nielsen Audio and is integrated into Nielsen's "watch" business segment that provides information and insights primarily to the media and advertising industries.

"It is a natural choice for a cash-flow-healthy company, to look for M&A opportunities for growth. We of course are looking for opportunities in China this year," Barns said. "We will consider M&As to fill a business gap, enter a new area or acquire talents. Our searching for M&A opportunities in China will cover all these categories."

Targets will be local companies, Barns said.

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