Aedas designs expansion strategy for mainland

Updated: 2011-09-29 06:51

By Chen Qide (China Daily)

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Aedas designs expansion strategy for mainland

SHANGHAI - Architectural designer Aedas Ltd will launch a four-year marketing strategy in China that includes the hiring and training of more designers, said Aedas Chairman Keith Griffiths on Wednesday.

Griffiths didn't disclose a specific sum, but he said that the investment is expected to account for 20 per cent of Aedas' annual revenue from China.

The past two years have seen rapid growth in China for UK-based Aedas, with yearly revenue having increased by four times since 2009. Estimated revenue will be close to 300 million yuan ($46.9 million) at the end of 2011.

"The investment rate will keep steady year-on-year, but the absolute value will grow as our business expands," he told China Daily in an exclusive interview.

"The investment will mean the company will have a growth rate of 30 to 35 percent in China in the next four years," he said.

The growth rate will make it possible for Aedas to raise the share of its Chinese business in its global revenue from last year's 20 percent to 50 percent in 2015, the chairman said.

To drive its Chinese business, Aedas will hold its first global board summit in Shanghai in November to discuss its expansion strategy for China, coinciding with the relocation celebration of its Beijing office.

"China is a country that develops very fast. We will talk about how we are going to grow in China and how we can work effectively in the country," he said.

Aedas has 39 offices worldwide and plans to have more new offices in China.

Ken Wai, managing director of Aedas China, said that Aedas already has a very successful office in Chengdu, Sichuan province. To keep up with the fast-growing western part of the country, the company is considering new offices in Chongqing and Xi'an in Shaanxi province next year.

Figures from the Ministry of Housing and Urban-Rural Development showed China completed construction projects valued at 4.31 trillion yuan in the first half of this year, up 26.1 percent year-on-year.

Experts have forecast that China's urbanization rate will reach 76 percent in the next five decades, indicating a huge market for housing and commercial buildings.

"Competition is fierce as many rivals from the United States, Europe and Japan have entered China, but the market still has much room for development," said Griffiths.

Aedas will give full support to its Chinese operations by bringing in signature designers, introducing advanced design expertise and training local employees to be high-quality designers, he said.

Aedas follows an operating model developed by Griffiths in 1999 after he spent more than one year studying the market.

Under the model, local subsidiaries are given incentives to expand and develop the business and expertise and shares are given to local directors to instill a strong sense of ownership.

Clients deal with staff who are owners of the company, not employees. These owners are all practicing architects brought in by the group with an international background who possess strong design and technical skills.

Although more than 50 percent of their shares are controlled by the international board, local owners can put profits back into the business for expansion.

Aedas' strategy is to reinforce its market position in Shanghai and Beijing first with strong design teams, and then go to second- and third-tier cities by setting up offices with the same model.