SHENZHEN - China may not have a team in
the World Cup football championship, which starts
on Friday, but that doesn't mean that tens of
millions of Chinese soccer fans won't be tuning in
to watch the games and thousands of entrepreneurs,
from travel agents to bar owners, won't be trying
to sell them things.
Many Chinese football
fans are planning to travel to the host country,
Germany, to watch matches in person, pumping about
600 million yuan, or about US$75 million, into the
Chinese travel industry. The price for a person to
participate in a group tour has skyrocketed to
more than 80,000 yuan or US$10,000, yet at least
50,000 fans have booked tours. The number would be
even bigger
were
tickets not so difficult to obtain and hotel rooms
booked, industry insiders said.
The
majority of Chinese soccer fans who cannot afford
the money or time to travel to Germany can enjoy
themselves in other ways than just sticking by
their TV sets at home. They can watch the games
online or on their mobile phone handsets. They can
hang out late in bars or clubs and drink beer.
They can buy gifts, clothes, home appliance
products with the World Cup logo. And, of course,
many will throw out their old-fashioned TV sets
and buy the big flat-screen models with high
resolution.
Seizing the opportunity,
China's TV-set manufacturers are competing to grab
bigger market shares. For instance, Hong
Kong-listed Skyworth, one of China's major TV-set
makers based in Shenzhen, has set an ambitious
target of selling TV sets worth 2 billion yuan
over the four-week tournament.
And Chinese
customers are encouraged to spend more on almost
everything as Chinese banks are issuing new credit
cards with favorable terms or gift incentives to
tap into the football mania.
The
World Cup is considered the world's most popular
sporting event, and is expected to draw viewers
from 189 countries. It is estimated that the 64
games during the tournament will attract 50
billion viewers worldwide, with an average of 500
million per match.
The state-run China Central
Television (CCTV), which has the sole official TV
rights for the World Cup, is expected to rake in
huge advertising revenues. In 1998, CCTV earned
less than 100 million yuan from the tournament
which attracted 2.8 billion viewers that year. In
2002, when the football championship took place in
South Korea and Japan, CCTV took in 450 million
yuan, with the number of viewers soaring to 7
billion.
This year, even more Chinese are
expected to be drawn to their TV sets. So, big
businesses have been vying for the top commercial
spots. China Mobile, the country's largest mobile
operator; P&G, the world's leading
manufacturer of consumer products; Chery, China's
home-brand automaker and King Boxing, China's
men's wear brand, are reported to have signed
commercial contracts with CCTV.
So far, it
is estimated that CCTV's advertisement revenue
from the World Cup has already reached 300 million
yuan. China Mobile alone paid 103 million yuan for
two exclusive sponsorship contracts for CCTV
specials.
China Mobile, which has more
than 70% of China's 415 million mobile-phone users
(as of end of April), also wants to cash in. It
offers to provide the latest World Cup news and
pictures on handsets via short message services
(SMS). The telecom operator also offers discount
package deals to lure more customers to use its
Internet services.
The Internet and
emerging wireless online technology allows major
portals and search engines to challenge
traditional media in broadcasting matches. The
six-hour time difference, which means the last
football match in Germany will kick off at 3.00am
in China, is a heavy blow to print media but a
plus to the Internet-protocol media.
Nasdaq-listed Sohu.com, one of China's
most popular portal/search engines, has inked a
deal with SMGBB.cn, the exclusive Internet and
wireless video broadcaster on mainland China,
defeating its major rival, Sina.com, for video
broadcasting rights.
Beer makers and
football tournaments go together everywhere, and
China is no exception. The three beer giants that
dominate China's market, all sponsors of the 2008
Beijing Olympic Games - Budweiser, Tsingtao and
Yanjing - look to the football World Cup as a
prelude to the big event in 2008.
Tsingtao, China's largest beer maker, was
reported to have paid 40 million yuan to sponsor
CCTV's World Cup features. It will also send a
33-ton wagon on a sales promotion tour of 36
cities. Meanwhile, Beijing-based Yanjing Brewery
will operate beer festivals at 500 sites in
Beijing during the World Cup. Tsingtao and
Budweiser will also sponsor beer festivals in
other cities.
American Budweiser, a World
Cup sponsor since 1986, will make the best use of
its ties with the football tournament to compete
with local rivals. It supplied canned beer with
special packaging, rolled out advertisements on
TV, and gave its retailing outlets a face lift
before the World Cup.
In addition, to
boost sales, many Chinese businesses are also
eager to take the opportunity to make their brand
names better known.
It is estimated that
in normal times an enterprise may have to invest
US$20 million for a 1% increase in worldwide
recognition. But the same expenditure on a major
sports sponsorship will lift its brand name by
10%. This explains why Chinese companies, which
are eager to establish their brand names, are
willing to spend big bucks on advertising during
major sports events like the World Cup.
Star Brazilian player Ronaldinho has had
numerous offers. First, China's computer giant
Lenovo signed him as its "worldwide ambassador",
then TCL, the world's largest television set
manufacturer based in Huizhou, signed him to help
it launch a series of new television models.
Aux Group, a home appliance manufacturer
based in Ningbo, Zhejiang province, has corralled
five football super stars, David Beckham, Ronaldo,
Zinedine Zidane, Raul Gonzalez and Roberto Carlos.
Their images will be used in the company's TV
commercials and other promotional materials.
In 2001, Aux named Bora Milutinovic, the
then coach for China's national football team, as
the ambassador for its air-conditioners, the first
tie between a Chinese home appliance maker and the
football event. World Cup fever in 2002 made the
then little-known Aux a widely known brand
throughout China.
The two home appliance
chain-retailer giants, GoMe and Suning, will
creatively start their own "World Cup" competition
in selling electronic products. While Suning will
select the best four types of color TV sets among
32 models, GoMe will expand the competition to six
categories, such as TV sets, computers, mobile
handsets, air-conditioners and other digital
products.
Yishion, a fashion brand in
Dongguan, Guangdong province, went even further by
tying a knot with the Federation Internationale de
Football Association (FIFA) on April 1 to produce
and sell sports/casual garments bearing the 2006
World Cup logo or mascot exclusively in China.
Farmers and housewives working in souvenir
factories in Haimen in Jiangsu province are also
smiling as World Cup matches draw near. Exports of
their products, gift footballs in particular, have
soared. It was reported that so far this year
Coca-Cola alone has bought a million gift
footballs from Haimen.
None of the Chinese
companies, however, are World Cup sponsors. FIFA
has signed partnership agreements with 15 global
companies, each of which will pay 60 million euros
(US$89 million) to FIFA for the sponsorship. The
minimum sponsorship for the next World Cup in
South Africa is said to be $80 million. The
threshold is obviously too high for China's
corporations.
China's largest global
corporations are state-owned petroleum companies,
banks and electricity suppliers, that would not
benefit from World Cup sponsorships.. The private
companies in China that would are far less
powerful than their foreign peers such as Samsung,
Panasonic and Coca-Cola. "Chinese companies need
to grow stronger to be part of the business battle
over the World Cup," Zhou Shijian, standing
council member of the China Association of
International Trade, told the media.
Candy Zeng is a Chinese
journalist based in Shenzhen.
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