Irish firm taps into fast-growing market of 400 million mobile users to develop innovative technologies

Irish mobile marketing company Púca did not need to look too far to see an opportunity in China - it was everywhere they looked.

Wandering the streets of China's sprawling cities, it's hard to imagine what the country was like before the arrival of the mobile phone. Beijing's fashionistas wear them on lanyards around their necks, with toy bunnies attached, and they switch models every three months.

Flat-bed tricycle delivery men bark into phones as they weave through traffic carrying teetering loads of mattresses or watermelons. In Shanghai, rows of old men sit on kerbs, taking in the sunshine and chatting away merrily into their mobiles.

Mobile phone penetration in Shanghai, the country's financial capital, surpassed 100 per cent for the first time this year, with 17.5 million handsets in a city with an official population of 14 million.

Púca was founded in Ireland in 2000 and its headquarters are in Dublin. It has become one of the leading providers of mobile marketing technologies and services to the Irish market, and is growing strongly in Europe.

The Chinese market is an exciting prospect for Púca, says chief executive Eamon Hession.

"Our strategy is to continue to develop new mobile marketing solutions in order to serve this fast-growing market of more than 400 million mobile users. We also plan to further integrate our European and Chinese business units so that each benefits from the other's experience," he says.

Púca provides technologies that help companies manage interactive relationships with their customers via their mobile phone. Púca bought Mobile Factor around the time of the Taoiseach's visit to China early last year and has secured contracts with a range of blue-chips including Nokia, Colgate, Reuters, Burberry and Total.

The company has also signed a strategic co-operation agreement with OgilvyOne to deploy mobile marketing solutions in China, focused on the sector known as FMCG (fast moving consumer goods) and, in particular, the personal care market, which is growing rapidly.

"Setting up a business in China is very easy, much less challenging than in Europe and more straightforward and cheap. There is a lot of freedom," says Stephane Vidaillet, general manager of Púca China.

Last month, Púca China signed a deal to provide a three-phase marketing strategy for pharmaceutical giant Johnson & Johnson.

The first phase involves scratch-to-win vouchers to increase brand awareness among pharmacy sales staff aimed at building up a database for Band Aid. In the second phase, pharmacy salespeople are asked to submit their "Olympic dreams" via SMS and the winner will receive tickets for the Olympics.

The final phase involves the creation of a mobile "Band Aid hurt healing centre". This involves consumers sending questions relating to personal first aid to the Band Aid centre, which responds with personalised advice. This helps to create a connection with consumers and build strong brand loyalty.

Púca China has proven successful at targeting multinationals. In February it signed a strategic agreement with the French retailer Carrefour, which is China's leading retailer, to support mobile couponing operations and other mobile marketing activities. The French chain has 75 hypermarkets in the major cities and had 400 million shoppers last year. Under the scheme, consumers use Púca China's Txtlink kiosks to print mobile coupons, which are subsequently redeemed in-store.

Part of the reason for Púca's success is that the Chinese market is at a developmental stage. "Clients are very receptive to new ideas and happy to jump ahead of the curve. Doing anything in mobile marketing in Europe involves lots of research and analysis, but in China . . . it's relatively easy to convince people of the huge opportunity," says Vidaillet.

However, this dynamism brings challenges. A factor to watch out for is cut-throat competition. "It's very difficult to protect anything here, like ideas. As soon as you set something up, you can often find that within a few months you have five competitors out there. Sometimes you have to deal with competition from your partners or from your clients," says Vidaillet. "Sometimes the value chain can be blurred . . . Your clients or partners will try and do as much as possible themselves and there is a lot of pressure on your piece of the value chain."

The best way to protect against these challenges is to go into the market with both eyes open and make sure you have the right help, Vidaillet says.

"Do not underestimate China and Chinese competition. There is a huge difference in culture and don't think that, just because your idea works in the West, it will work in China. It takes a lot of planning," says Vidaillet.

"Find reliable Chinese partners, staff, legal counsel. They can't be just average - they have to be the best. And make use of Enterprise Ireland . . . They are very business oriented and not bureaucratic."

The fact that China is such a dynamic and low-cost environment means Púca now hopes to put its Chinese experience to work at home in Ireland. "We do the innovation [ in China], which we can bring back to Ireland," says Vidaillet.