WPP LLC, the world's largest advertising company, sees China overtaking Britain as its second-biggest market in two to four years, its CEO said Sunday.
Although the company last week cut its outlook for this year because of slowing growth in the United States and the Eurozone debt crisis, it has been making a string of small acquisitions and investments in China.
I would say China should surpass the UK in about two to three, four years, Martin Sorrell said in an interview with Reuters.
WPP's revenue in China is about $1.1 billion, making it the company's fourth-largest market by revenue currently, Sorrell said.
Next year, China is expected to surpass Germany, which is in third place at $1.3 billion in revenue. WPP's largest market is the United States at $5 billion, followed by Britain at $2 billion.
There are acquisitions here, there are some good companies here, but they are small-scale. And therefore the big growth opportunities for us are not so much acquisitions but organic growth, Sorrell said.
Sorrell, who founded WPP in 1985 and grew it into an advertising juggernaut to include ad agencies JWT and Ogilvy & Mather, said preliminary forecasts for the full year indicated like-for-like revenue growth of 5 percent, compared with a previous forecast of 5.9 percent.
As an indication of China's importance to the company, Sorrell is in Shanghai to co-launch the WPP School of Marketing and Communications on Monday.
The school will be part of the Shanghai Art & Design Academy, and will seek to train students in marketing and communications in a three-year program.
Sorrell sees the venture not only as a good recruitment arena but also an opportunity to instill in potential employees an early sense of loyalty in an industry plagued by high turnover.
One of the ways of trying to improve a firmwide loyalty is through this thing, [not only] for your existing people because it is another area that they can make a contribution to but also [for] the people you will be recruiting because you establish early relationships, Sorrell said, adding that finding talent in China is an issue for the company.
(Editing by Ron Popeski)