Accenture's first massive SEA acquisition with Entropia: How it transpired

Accenture Interactive has snapped up Kuala Lumpur-based Entropia, marking its first massive acquisition in Southeast Asia. Founded in 2016 by founder and senior partner Prashant Kumar (pictured above right), Entropia has more than 210 employees and the acquisition is set to expand Accenture Interactive’s creative talent pool, creating more learning and growth opportunities for employees across both organisations. 

While Accenture Interactive declined to comment on the monetary value of the acquisition, Flaviano Faleiro (pictured above left), Accenture Interactive’s president for growth markets, told MARKETING-INTERACTIVE in an exclusive interview that Entropia’s senior leadership team will continue to take part in driving the business as it does today. Entropia will also retain its brand identity as part of Accenture Interactive for the immediate term to effectively manage the pace of integration and maintain momentum in the market before full integration, he added.

Accenture Interactive said that it is constantly finding new ways to engage with its clients, and with the addition of Entropia, Accenture hopes to transform and reimagine the entire business through the lens of experience, Faleiro said. As such, Entropia was “a natural fit” for the company. The acquisition will also expand the creative talent pool within Accenture Interactive and create more learning and growth opportunities for people across both organisations.

“Entropia's capabilities strongly aligned with and complemented the capabilities and services that Accenture Interactive offers. The company also aligns with Accenture Interactive’s organisational culture and comprises a talented and multidisciplinary team with a commitment to engineer the most transformative customer experiences,” Faleiro explained.

According to him, both companies also share common cultures and are passionate about driving innovative solutions to value-add clients’ business and create an inclusive culture.

There are very important similarities in what both organisations value as a team – the ability to embrace change to drive innovative solutions for their clients and communities.

Faleiro said the company will preserve these elements that have made each business succeed in its unique ways and look forward to building on this foundation for successful integration. Accenture Interactive has made several other notable acquisitions of ad agencies in the past - Droga5 in 2019, The Monkeys and Rothco in 2017, and Karmarama in 2016. Just last month, Droga5 expanded its global footprint with an office in Tokyo and plans to open two more in Brazil and China in the next 12 months. 

When asked about the similarities in the ad agencies it acquires, Faleiro said it targets acquisitions in very specific and high-growth areas of its business. The acquisitions are designed to accelerate Accenture Interactive’s access to unique capabilities and then the firm builds organically on top of them.

Our acquisition of Entropia is a great example of this 'strategic tuck-in' approach that allows us to lean further into our vision to take experiences to the next level. 

The perfect time to join Accenture Interactive

Since its founding, Entropia has bagged several renowned clients including BMW, Tenaga Nasional, Nespresso, KFC, Telekom Malaysia, and Lazada. It most recently teamed up with BMW to create an AR showroom for the new BMW X5, bringing the car and its features to life for consumers during the lockdown. It also helped Pepsi create its first AR concert on a bottle for Malaysians, featuring singer and actress Siti Nordiana and winners of the #PepsiBoldTalent TikTok challenge held at the end of 2020. With Nespresso, Entropia worked with the client to localise a global sustainability campaign by collaborating with renowned Malaysian artist, Red Hong Yi, to create an art installation titled "Kaleidoscope". 

For a few years, including 2020, Entropia has been crowned Overall Agency of the Year at A+M’s Agency of the Year 2020. At the same time, Noir by Entropia was also named Overall Media Usage MARKie at A+M's MARKies 2020, walking away with three gold, one silver and one bronze trophies.

Entropia's Kumar said this is the perfect time to join hands with Accenture Interactive and raise the bar in transforming data-driven marketing for businesses. "I am thrilled to have both organisations come together and expand the canvas for our people, clients and their customers," Kumar said. When asked why it chose to join Accenture Interactive, Kumar said Entropia has always believed that imagination and engineering do not belong in silos. As businesses organise more and more around customers, who are not just a record in a database but living breathing people, he added that true ingenuity emerges today from technology and empathy coming together.

“Accenture Interactive, with its depth and breadth of skills in data and technology, is extremely well suited for us to co-create that business of experience. We felt together we could truly reimagine experiences with meaning, relevance and profitability,” he said.

Currently, Accenture works with brands such as Changi Airport Group, INFINITI, Radisson Hotel Group, Japan Airlines, Bharat Petroleum, and Anheuser-Busch InBev. Most recently, it was appointed by Jaguar Land Rover to transform its global marketing operations, joining forces with Spark44 to create a new bespoke model. In May, it also established a joint venture with Shiseido to accelerate the brand’s digital transformation as part of a strategic partnership announced in February this year. As of the second quarter of 2021, overall Accenture revenue for this quarter was US$12.1 billion, an 8% increase from the same period last year. In Q1 2021, Accenture Interactive returned to mid-single-digit growth from a low single-digit decline in the second half of 2020, as clients focus on creating new experiences in the new environment. Accenture posted overall revenue of US$11.8 billion for this quarter, marking a 4% increase compared to the same period last year.

Without a doubt, the acquisition opens new opportunities for Entropia’s clients. More specifically, Kumar said it helps them relook at their integrated brand experience spanning across the entire value chain covering product, pricing, access, communication, and commerce, among others.

To overcome today’s competitive landscape, Kumar said Entropia will require a great emphasis on experience reimagination. According to Kumar, this will mean plenty of new learnings in the upstream value chain and thinking truly “whole brain” to maximise value for clients.  

When Kumar first launched Entropia in 2016, he sought to reconceive what the marketing of the future could be like, by playing with different models, skills mix, structures and processes. Entropia - a word that joins entropy and utopia - is meant to denote the movement from disorder to order. Kumar was previously president of IPG Mediabrands in Asia world markets and CEO of IPG Mediabrands Malaysia. Shortly after, Ramakrishnan CN joined him as partner after eight years at IPG Mediabrands Malaysia as MD. Kumar and Ramakrishnan were also later joined by Neeraj Gulati and Pavan Kharbanda who both worked with them at IPG Mediabrands previously.

Over the past few years, Entropia has launched various lines of business and made several hires to beef up its leadership team and offerings. Last month, it appointed John Dorai as head of creative for Entropia Blanc. He brings two decades of creative experience with a hybrid profile of art and copy. Other notable names it brought on board also included Syahar Khalid as partner for integrated media, Eduardo Mapa Jr. as partner and country head of Entropia CBR in the Philippines, Vamsi Vanka as head of its tech consulting division, and Kelford Hor as engagement director for its eCommerce division, among others. It also acquired the 360 video business from Singapore-based VR company VOSTOK VR in 2019.

Last June, Entropia entered into a strategic partnership with Havas Group Malaysia, which saw Havas Immerse working with the former on media briefs and duties for the local market.

When asked how this acquisition impacts this particular partnership, Kumar said even with the acquisition, its professional commitments to clients and partners will remain. Kumar told MARKETING-INTERACTIVE that this latest acquisition opens new opportunities for independent agencies in Malaysia – new potential partners; a new shape of competition; new models of value.

It also validates that independent agencies in Malaysia and Malaysian talent, in general, can bring disruptive quality that can hold its own against traditional leaders.

"It’s also a vote for the Malaysian economy and its dynamism that Accenture Interactive has chosen Malaysia for their first acquisition in this space in Southeast Asia. We feel we have shown the way and many can follow and shine. It will make us happy to see that happen," he added.

Divyesh Vithlani, Southeast Asia market unit lead, Accenture said: “As more consumers shift to online channels, the growth of the digital economy in Southeast Asia has accelerated the massive disruption that brands are experiencing. This acquisition will allow us to expand our digital capabilities to meet the growing demands of our clients.”

“Entropia’s addition will help us deliver innovation through technology to drive commerce and growth for our clients in Southeast Asia. It’s also an exciting chapter in our journey to strengthen and expand Accenture Interactive’s presence in the region,” said Thomas Mouritzen, Accenture Interactive’s lead for Southeast Asia.

Read the rest of the exclusive interview here:

MARKETING-INTERACTIVE: How do you feel about not being an independent anymore?

Kumar: Our ownership may change, but we intend to continue being independent thinkers and creators. Because that will always be the crux of superior value for our clients. Think of us as a hybrid organism – a highly predictable machine when it comes to delivering reliability and rigour; but fierce and fearless free thinkers, when it comes to creativity. Our intent is to have leaders’ scale but challengers’ attitude.

MARKETING-INTERACTIVE: What is your take on the independent scene in Malaysia?

Kumar: It’s fairly vibrant. There are some hot shops doing interesting work, and there are some really good people in there. As a culture we have always been underdogs and you can reliably find us cheering for one, even if that’s not us. We would love to see some of these independents get their business model right and scale up successfully. We started in July 2016 and became one of the largest and most celebrated in four years. Am sure it can be done again. By one of the promising independents.

MARKETING-INTERACTIVE: What type of culture are you looking to build following the acquisition?

Kumar: Culture follows value just as value follows culture. Our CAPRI cultural code – curious, agile, playful, relentless and inventive – isn’t just a corporate indulgence or sloganeering, but it links seamlessly to our offering and is designed to maximise client value. We hope to continue that culture and in fact entrench that further.

MARKETING-INTERACTIVE: What is in the works for you this year post-acquisition? 

Kumar: Apart from the integration of the two teams, the priority will be enhancing our strategic depth and forging a best of both worlds offering for our clients. The Malaysian economy is set to emerge with a vengeance from the COVID slump by early next year. We hope to be ready for that new beginning. There are dozens of industries pressure cooked into transforming their operating model, and as always where there is change there are opportunities.

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