China’s Olympic marketing drive
With billions spent on the games, one brand is likely to come out on top: China.
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| The Olympic mascots or ‘Fuwas’ are the centre of a huge merchandising drive [GALLO/GETTY] |
It’s a sunny Friday afternoon and a football match is under way between two Beijing school teams.
The game is fast-paced and competitive and the boys show off solid skills.
Their training from experienced coaches is showing signs of paying off – with the help of Adidas.
| Olympic money-spinner |
 Predicted global audience for 2008 games of more than 4 billion people 54 companies have signed up as Olympic sponsors and suppliers Organisers expect income of $140m from ticket sales and $300m from souvenirs. Beijing officials say expected profit $16m IOC predicting much higher profit, possibly more than $224m surplus made by Los Angeles games in 1984 |
The German sports giant is working with local schools in Beijing, providing football equipment, uniforms, coaches, and organising competitions.
Adidas’s “grassroots programme”, as it calls it, is providing sporting opportunities in Chinese schools that until recently have tended to emphasise class work, neglecting physical education.
But Adidas stands to win big as well, of course. Its sponsorship feeds a sporting passion but is also an investment, fostering brand loyalty at the youngest ages.
Eventually it plans to expand the programme to around 20 Chinese cities, potentially reaching out to millions of future Chinese consumers.
Companies such as Adidas have seen consumer profit potential in China for years.
Now, the Beijing Olympics has bumped the competition up several notches.
Adidas has signed up as a partner to the 2008 games along with 54 other sponsors – the largest number of companies ever involved in a single Olympics.
Those uncomfortable with the level of commercialism tied to the planet’s biggest sporting event can only brace themselves – in the last year before the games finally begin even more companies will jump on the Olympic bandwagon.
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| Sports giants are eager to get a slice of the China market [GALLO/GETTY] |
A lot of money is at stake. According to some estimates as much as $5 bn will be spent on advertisements and TV show sponsorship even before the games themselves actually begin.
It makes business sense, if you simply take a look at the numbers.
The last Olympics were held in Greece with a population of 11 million.
Sponsoring the 2008 games has the potential to reach hundreds of millions of new Chinese consumers who, for example, just might consider buying those Adidas shoes.
Many Chinese consider the event a coming out party for their country, and companies hope to attach themselves to the sense of nationalism the games evokes.
And state media is doing its part too, carrying the latest Olympics news on a daily basis, helping to further raise the hype.
Major multinationals such as Adidas are hoping not only to benefit from brand awareness during the two weeks next August, but also to stick around in the afterglow period and for years to come.
On the flipside, domestic Chinese companies such as PC giant Lenovo and lesser-known appliance makers such as Haier, are also looking to the games as a launchpad for their brands on to the global market.
Greg Paull, whose consultancy R3 has been tracking the business side of the Olympics, says the situation is a two-way street.
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“I think the goals of the foreign companies are very different from the local companies,” he says.
“For the local companies, they see the Beijing Olympics as their chance to go global, to expand beyond China. They really see the prospect of getting a global audience for the first time.
“For the global companies it’s the opposite. They see it as a way for them to really entrench themselves in China.”
So next year the millions of viewers around the world tuning in to watch the games will be faced with a barrage of advertisements for Yanjing beer and other brands that until now have been little known beyond China’s borders.
That these domestic brands are doing well enough to commit enough money to become an Olympics sponsor, might be some indication that they can hold their own against global giants.
Competition for customers is going to be as fierce as any competition out on the field and it is far from clear which brands will come out on top.
For the government and games organisers though, the clearest winner will be the China brand itself.
Beyond gaining a more vibrant consumer market, the 2008 Olympics will be China’s way to sell itself to the world.