When Ben Zhang collected his wages for three days work as a movie extra, more than he earned in a month as a teacher, it was enough to convince him that a better future awaited in China’s burgeoning filmmaking business. In 1999, he and his sister Jacqueline began their new life, launching a production company in China’s commercial capital.
China’s nascent advertising industry in the 90s and early 2000s was a dog-eat-dog environment. International production companies entered the market to capitalize on the recently opened financial floodgates but often failed having underestimated the wild lawlessness. Local companies struggled against more experienced Hong Kong and Taiwanese competitors, and, with only limited reserves of capital, were starved to death by the notoriously late Chinese client payments. Through business acumen, an innate understanding of the complex business landscape and dogged hard work, the Sichuan siblings’ company, Gwantsi, has endured as one of the only survivors.
Ben Zhang, President of Gwantsi｜观池董事长张斌
These days, the 200 person, company headquartered in Shanghai with branches in Beijing, Chengdu and Hong Kong, is an omnipresent force in the Chinese commercial industry. In 2015 they handled around 400 commercial jobs under their three main business areas of commercial production, interactive technology and original content. This year, Gwantsi was responsible for producing three of the five Chinese New Year Gala public service announcement spots, the most prestigious and widely seen commercial slot in China, becoming the first production company to to do so for three consecutive years.
Not content to rest on their laurels, Ben and sister Jacqueline intend for Gwantsi to be at the forefront of China’s evolution from manufacturer into innovator and creator. They have constructed a new training base for young talent and are offering investment, partnership and incubation services for promising creative projects, be they film, animation or virtual reality.
SHP+ sat down with Ben Zhang at the Gwantsi head office in Shanghai, to learn more about the company origins, how they weathered the storms and their intention to lead China’s content charge.
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Tell us about your background and how you came to start Gwantsi?
Gwantsi is the name of my hometown, a small town deep in the mountains of Sichuan. The first time I came across the filmmaking industry was by chance. I played an extra in a movie and made about 750RMB in three days. At that time my salary as a teacher was 600RMB a month. I decided to jump into the production industry and spent five years in a production house. Over the years, Chinese production had developed a lot and was getting more involved in the global market. In 1999, I quit my job and started Gwantsi.
What was the production company landscape like in 1999?
The conditions were severe with pressure and competition from Hong Kong and Taiwan companies, followed by those from Singapore, Korea and Japan. Local production houses were weak and unprofessional at that time. Such competition helped the development of local companies but also forced many out of business. Gwantsi was one of the first companies that could compete with international production houses and one of the few to survive that period.
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You’ve been working in this industry for a long time. What changes have you seen?
There have been four stages: first, the 1980’s ‘old filmmaking factory’ model. Then the 90s to 2000s ‘half international’ business model, namely south east Asian production houses entering the China market, bringing in advanced technology and management. Then in 2003 the start of the ‘international process’ and then, finally, ‘Globalization’ – the local Chinese companies running at an international level. There are still gaps between the local ones and the international ones, but that gap is closing. International companies have helped improve Chinese commercial production and brought new ideas like marketing into the industry. The industry here is following international trends and nearing maturity.
How did Gwantsi compete with established companies and ultimately survive?
My sister Jacqueline, the co-founder of Gwantsi, and I, were the “four-no’s” people in Shanghai: no car, no house, no bank deposits and no personal life. We devoted ourselves to the company 24-7 and such enthusiasm has never changed.
As the company managers, we’ve always tried to keep an open mind. As a local company, when we are not strong enough, we learn from those international big companies. We always try to keep ahead of our competitors. At the beginning of Gwantsi, we absorbed talent and production resources from Hong Kong, Taiwan and other south east asian areas, and then the western talent and production resources. When other companies started doing the same thing, we then switched to explore local markets and local talent.
Did you receive investment in those early years?
Gwantsi faces a lot of pressure. We didn’t have any investment when the company started. We were all on our own. There are risks in getting finance from the bank, as well as entering the capital market. It is very different in the filmmaking industry, that we insist on the ingenuity and craftsmanship in our work. You have to love your job in order to go further in this industry. We fear that capital will corrupt our intention to make good products. The China market is a very strange one. We sometimes get frustrated by the fact that even some Fortune 500 companies are allowed to be behind on payments in China. This year we are planning to get investment to help us craft the best possible products.
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At last year’s Shanghai London Advertising Forum, one panelist said if foreign companies want to work in China, they should work with Gwantsi because you’re the local Mafia. What did he mean by that?
I think this is because we’ve worked with a lot of foreign companies and are familiar with the their management style. Our advantage is that we can cooperate with them with fewer misunderstandings. Gwantsi enjoys a great reputation and credibility in this industry, which we have found to be very important to the company development. No matter what difficulties we’ve faced, as long as we have made a promise, we will see that the work gets done.
What are the biggest challenges for international companies who come to China?
In 2006, a foreign company tried to establish an office in China. I set up a meeting with the owner and advised them that, in order to survive in the market, they should hire a local management team because they know how to run the business in China. The advantage for foreign companies is their production quality. However it can be very dangerous to not localize your management. This company closed down within half a year. Many of the Fortune 500 companies have localized their management team, which is provides their basis to survive in China. In this industry, we share the same concepts but the way we approach is very different. You could easily get knocked out if you don’t localize your management.
What are the unique characteristics of a Chinese management team?
Culture, ideas and the market are what differentiate a Chinese management team and a foreign one. You won’t have problems with payments in the west. There are many cognitive differences, for example, the way the audiences understand and appreciate a work. Other countries don’t have as huge a market as China. Audiences from Shanghai have a different cognition in comparison to those from Beijing, yet we have one media that covers the entire country—CCTV. You have to produce something that works across the whole of China.
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Which Gwantsi project are you particularly proud of?
The most meaningful work for me is a series we did after the earthquake in Sichuan in 2008. We put company earnings from our first decade into a preservation project for the culture of a minority called “Qiang” . We spent three years exploring their culture and organizing them in order to present them in several videos and an opera.
What is it that inspires you to promote the Chinese culture?
It’s not just me. In China there are many groups of people trying to promote Chinese culture to the world. I am merely a part of this movement, and an executor. Chinese culture is a major part of the world and needs more recognition. From the perspective of filmmaking, Chinese culture is more attractive when presented with an international approach. This multicultural integration requires time and effort to achieve.
Are you now working mostly with Chinese or foreigner directors?
About 60% of directors we work with are foreigners, but we do not have a preference. Whoever makes the best product is our first choice. We are planning to increase the local director share to 50% this year. Local directors are making progress through cooperation with foreign directors and production teams. There are great local directors, the level is improving and some are already making their mark on an international level. However I am focused on their development as a team and helping them through that process. They are our future talents.
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Gwantsi is moving into new areas – technology, VR, TV shows, movies etc. What do you want to do with Gwantsi in the future?
Gwantsi’s future development is focused on crafting the best content. We see ourselves as a content provider. Besides production services we provide for our clients, we are also trying to dig into original content. Currently, we are encouraging creative ideas from college students in China and overseas.
Instead of the current filmmaking market, we are focused more on the next generation. My sister Jacqueline is responsible for creative technology such as VR and the development of experiential creative content. As for me, I’ll focus on exploring the sub-cultures of the youth, their unique ‘intellectual property’. Gwantsi will provide this young talent with funding and technology and education. When combined all this with their ideas and passion, I believe we will achieve something great.
The first phase is already in progress. All the resulting work will be released this summer. At the same time, around June, our first training base will also be finished, targeting young filmmakers and students. We will have selected directors, cinematographers, composers, post production crews from all over the world to lecture these students, and bring them on site where they will have the opportunity to go through the entire process of making a film. We provide this young talent with both academic and practical training. We propose the topic and they will shoot around that. We will critique their final pieces and select a winner. This is not just homework, but real practice.
- Click here to learn more about Gwantsi’s competition for Chinese film students.
- Gwantsi is hiring. They are especially interested in specialists in TVC, interactive technology, programme development, original content development and creative design. Email HR@gwantsi.com for more information.