China’s quest for commercial supremacy is being played out at the World Cup

The 2018 World Cup so far has been rich in sporting upsets, with the demise of pre-tournament favourites Germany and Spain having been expertly sealed by minnows South Korea and hosts Russia. Beyond these tales of grand ignominy and unforeseen triumph, the tournament has also been made distinctive by a surging interest by fans and sponsors of China, which is shaping much of the action off the pitch. In spite of the nation’s absence from the world cup, tickets in excess of 40,000 have been sold to fervent Chinese supporters and as well as populating Russian turnstiles, China’s presence is extending into other areas of the World Cup.

In those infrequent moments where your eyes are drawn away from the pulsating action taking place on the pitch, you are sure to have detected the name ‘Wanda’ emblazoned across the advertising boards surrounding the pitch. Dalian Wanda, the Chinese real estate-developer-turned entertainment giant boasts an impressive portfolio of acquisitions that comprise its global empire, which includes the American AMC Entertainment Holdings and the iconic Legendary Entertainment film studio based in Hollywood. In recent years, It’s owner Wang Jianlin has been resolute in his effort to make Wanda FIFA’s only top-level Chinese sponsor, a deal which will last until 2030. Based on the scale of investment in football, he clearly views the sport as an effective means of reversing a political tide set in motion last year in China, which left him unable to manage a significant proportion of his debt and international assets, culminating in a revenue drop of 10.8 per cent in 2017 and which forced the sale of Wanda’s 17% stake in Atlético Madrid.

 

WANDA

In 2016, the Chinese president outlined a 50-point plan Xi Jinping which will see China host and eventually win the World Cup, turning the nation into a “soccer powerhouse”. His demand for a complete overhaul of Chinese football is shared across the country and has fostered a keen interest among fans in both domestic and European sport, from which it has become big business for brands. Sam Burne James, news editor of PR week underlined the logic behind this investment, stressing that “Chinese companies get two things from sponsoring the World Cup. The first is access to Western audiences… The other is a cosmopolitan veneer to their brands, which they hope will resonate with their sizeable domestic markets,” Accordingly, Wang, like many of his fellow businessmen of China, has sought to reposition Wanda in line with a new set of interests and spending habits among China’s prosperous middle class, which has a far greater taste for leisure and entertainment.

By virtue of these shifting customs and interests of the Chinese populace, the Russia World Cup has become a key component of the business strategy of the 7 new players from the East, notably Wanda, Hisense, Vivo and Mengniu who have poured billions into it, in the interest of raising their profile and ubiquity. The aggregate sum of their spend is around the £1 billion mark, a substantial £400m more than the tournament’s second-biggest national sponsor, the United States, and this could represent a much deeper Chinese investment in the game to come in the future. In terms of exposure, the World Cup is unparalleled in its scale and reach. On Tuesday night, for example, a peak audience of 23.8 million watched England overcome Colombia on penalties. Therefore it is no surprise to see Chinese enterprises flexing their financial muscles within the World Cup arena, in a bid to engage not only a domestic demographic but also to increase global exposure of their brands and leverage on foreign markets

 

HISENSE

One of the noteworthy commercial success stories so far this tournament has been that of Hisense, the multinational major appliance and electronics manufacturer, which has already seen a major return on its investment in Russia. Like Wanda, occupying the advertising space on billboards in play has been a fulcrum of Hisense’s commercial strategy and this prime exposure has triggered significant growth in sales of TV’s in Russia since the commencement of the tournament, which has reportedly risen by 300 per cent. Liu Hongxin, the President of Hisense is conscious of the advantages of aligning his Company with big sporting events, having already experimented with the Euro 2016 tournament in France as well as the Australian Open in 2014. Liu recently asserted that sports sponsorships have indeed been a driving factor of brand growth and that the World Cup “will greatly improve global awareness and economic value for Hisense”. Another high profile, if unfamiliar, Chinese sponsor presently at the World Cup is the smartphone maker Vivo, which is reported to have pumped in $500 million as part of a six-year package that will see the brand become a staple as well in upcoming tournaments, Qatar 2020 and the Confederations Cup. Through its brand activation so far in Russia, Vivo was able to sell out its new NEX smartphone within four hours.

In the absence of some common Western brands at this year’s World Cup, notably Sony, Emirates, Johnson & Johnson and Castrol, Chinese enterprises have been more than happy to fill the void and align themselves with Russia 2018. With good reason, a great many Companies had predicted that sponsoring a tournament held in a nation seemingly in a state of perpetual scandal, whose actions have been nothing less than deplorable, was deemed simply too risky in a climate where trust is of paramount importance. However, hindsight is a wonderful thing and so far Russia 2018 seems to have surprised everyone. Not only has the Football been enthralling, the narratives gripping and the support rapturous; but it has also been devoid of the violence or distractions that have marred recent tournaments and had been widely anticipated, all of which have made it a genuinely satisfying experience for fans far and wide. And while Boris Johnson may view these plain sailings as a grand exercise in PR for Putin, consumers are currently preoccupied only with the joy and entertainment of the game. Under these conditions, perhaps more Western brands would have been wise to invest in this World Cup.

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