4 - FIFA/CIES International University Network

EYE ON THE
INDUSTRY
GREAT HAUL OF CHINA
For years the West has coveted the Chinese market, often using sponsorship
for entry. Now traffic is flowing in the opposite direction, writes Barry Wilner.
SPONSORSHIP OF sport in China by major
global brands peaked before and during the
Beijing Olympic Games. But now a new trend
is emerging as Chinese companies become
sponsors on the international scene as they look
to build share in global markets.
Li Ning, a sportswear company founded by
the Olympic champion gymnast and six-medal
winner at the 1984 games in Los Angeles,
reached an agreement with Shaquille O’Neal in
2006 and since then has sponsored Sweden’s
Olympic teams, plus Spain and Argentina’s
basketball teams.
Additionally Anta sponsors tennis star
Jelena Jankovic, Xtep partners English Premier
League football club Birmingham City and most
recently, Peak, which eventually hopes to be the
Nike of its homeland, signed a five-year deal
with the women’s tennis tour that is worth more
than $1 million annually (see pp. 44-45).
The idea is to use sponsorship of foreign
athletes to boost brand image within China’s
sporting goods market, which is worth more
than $6 billion and is projected to grow 14 per
cent a year.
“More than 30 Chinese firms partnered with
the Beijing Olympic Games, including PC-maker
Lenovo as a global Olympic sponsor. Chinese
electronic gadget-producer Aigo sponsored the
McLaren-Mercedes Formula One team and
Manchester United,” says Zak Brown, CEO of the
Just Marketing International agency.
“This trend will continue with more Chinese
companies getting involved in international
sports sponsorships, with an increased emphasis
on activation beyond just having signs in the
field...Motorsports would be among the naturals.
“The massive global audience and gateway to
Li Ning at the NBA signing ceremony in 2005 - Getty Images Sport
eager buyers of automotive, consumer and tech
products and goods should drive expansion of
investment in motorsports.”
But basketball remains the top target of these
Chinese sponsors.
Peak is the official sponsor of the NBA
in China and is most competitive in the
marketplace with its basketball shoes. It opened
more than 1,000 new stores in the past year,
with total revenues doubling to $456 million,
and has deals with a dozen NBA players,
including all-stars Jason Kidd and Ron Artest.
“We just want to extend our brand name
from basketball to tennis,” says Peak CEO Jim
Xu. “China is our top market. Signing deals with
international sports competitions is to attain
our goal of becoming more global and more
professional. But, of course, the primary impact
will be on China and then the global market.”
Still, attracting big names across a wide
spectrum of sports eventually would be a
wiser approach. “In general terms, the major
international sports that have a big following
in China are NBA, soccer [football] and golf
- the latter among the sought-after wealthy
professional Chinese demographic,” adds Brown.
“As such, they attract foreign sponsorship
and brands seeking penetration in the Chinese
consumer market. English Premiership clubs
such as Manchester United have established
permanent relationships in the country through
demonstration tours, academies and exchange
programmes. This is a trend that will continue.”
Next to look for might be more widespread
involvement by Chinese food, beverage and
transportation services. Eventually, it is also
predcited, investment firms, banks and
automakers will become big players too.
BRANDS + MARKETING
BACK THE BID?
Adam Paker asks whether
sponsoring bids to host major
sports events is worth it.
In December FIFA will, for the first time,
select the host countries for not one but
two World Cups.
All of the bids have sponsors but is it
worth backing an event bid considering
the risks associated with it? The question
was asked in England in May, when
the country’s 2018 backers braced
themselves for the fallout from then
chairman Lord Triesman’s accusations of
bribery against rival bids.
Bid sponsors gain limited rights and
a short time in which to activate them.
Worst of all, sponsors of unsuccessful bids
face reflected embarrassment – and live
in fear they will be tarred with the same
brush as the failed (and in the public’s eye,
incompetent) bidding committee.
Moreover, even sponsors of
successful bids cannot be complacent,
since the period of public jubilation
is finite. Some brands (EDF Energy
in relation to London 2012) choose to
extend their relationship by sponsoring
first the bid, then the event itself. But
this inevitably entails much higher costs
than may initially have been envisaged.
Ultimately, backing a bid is a gamble
and the smartest sponsors will treat it
as such - in the first instance by paying
an amount that reflects option pricing
and a dispassionate assessment of the
bid’s chances.
Then, sponsors must activate their
rights hard in the run-up to the decision,
develop a game plan to capitalise on
success and be prepared to turn the
page and move on quietly to other
marketing campaigns if the bid flops.
The attractions are obvious. There’s a
record 11 countries bidding or co-bidding
for the 2018/2022 World Cups, and
with no clear front-runner for either
tournament, levels of interest should add
up to a bonanza for the bid sponsors.
A brand has the chance to appear
both patriotic and public-spirited, while
tapping into the public elation that comes
with success - who can forget the scenes
in London’s Trafalgar Square in 2005
when the city celebrated a successful
campaign to host the Olympics?
It’s also a gilt-edged opportunity
for some ‘legitimised ambushing’.
Morrisons is sponsoring England’s
2018 bid, even though the food retailing
sponsor of the English Football
Association (which is meeting most of
the bid costs) is arch-rival Tesco.