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Last Updated: Sunday, 16 July 2006, 15:51 GMT 16:51 UK
Scoring on China's sports fields
By Bill Wilson
Business reporter, BBC News

Workman cleans large Beijing 2008 sign
The country is focusing on the Olympic Games two years from now

The Beijing Olympics are just over two years away, and it is not just athletes and the Chinese public that are building up to a sporting frenzy.

Away from the playing fields, swimming pools and sports tracks, teams of highly-trained marketing executives from many of the world's biggest companies are pushing their bodies to the limit in search of the big prize - China's potential 1.3 billion consumers.

China's rapid economic growth is also driving up living standards and disposable incomes, particularly in urban areas.

The build-up to the Beijing games is seeing China become more sports conscious, with increased television coverage of activities including football, table tennis, badminton, motor racing, volleyball and basketball.

Companies are looking for partnerships with sporting events or competitors - and other ways of getting greater access to a more affluent generation of Chinese sports fans.

Government approval

However, whether it be sporting event organisers, teams or businesses looking to crack the market, there are a number of things for investors to bear in mind to avoid getting a rude awakening.

Finding a successful Chinese strategy can be hard, as Manchester United found when it was forced to close some of its sports cafes, or Australia's V8 super car racing discovered when it picked the wrong local partner.

China is a hugely diverse nation of different regions and social demographics, with 171 cities of over one million inhabitants.

Sport in China is effectively owned and run by the government, and nothing can get done without their go-ahead
Mark Thomas, S2M

A recent C-Zone conference at Chelsea FC's Stamford Bridge stadium in London brought together some leading sports and business administrators, including officials from the 2008 Beijing Olympics, to look at some of the opportunities in China.

"It has to be remembered that sport in China is effectively owned and run by the government, and nothing can get done without their go-ahead," says Mark Thomas, managing director of conference organiser S2M, a China-focused sports and lifestyle marketing firm.

"No contracts can be signed without the right approvals and permits from the appropriate people, be it at central or local government level," he adds.

"But despite this and other structural issues, it remains an embryonic market of huge potential for sports marketing."

'Younger audience'

Sportswear maker Adidas is one firm looking to take advantage of this market.

Its strategies include supporting grass-roots football days, backing the Chinese women's volleyball team and using the iconic status of David Beckham.

Beckham's appeal in East Asia is well known, and in China the German sports giant has created its own line of clothing with a logo showing him striking a free-kick.

China's Zhou Suhong smashes the ball during a match with Cuba in Beijing
Adidas hopes to boost sales via China's female volleyball team

For volleyball fans it is using viral internet advertising to try and reach a younger audience.

"That has proved very popular as has a blog for fans to ask players questions, and we have also produced a series of Japanese-style manga cartoons to introduce team members to the public," says Marcus Kam, head of sports marketing at Adidas China.

Its most high-profile move has been signing up as equipment supplier to the Chinese team for the 2008 games.

National sales

Another firm signed up as an official International Olympic Committee (IOC) "top partner" is Chinese computer maker Lenovo.

Xie Long, the company's head of Olympic sponsorship, says: "We believe sports - specifically the Olympics - is the most powerful platform for us to promote Lenovo to the rest of the world."

We made sure a national brand was our top sponsor
Stephen Watson, A1 Grand Prix

The firm is trying to promote itself in China in cross-promotion with other IOC partners such as Visa, Coca-Cola, and Kodak.

It has also signed up with Brazil and Barcelona star Ronaldinho to give it reach to another segment of the Chinese population.

Another sports sector looking to crack China is the "world cup of motor racing" - A1 Grand Prix.

Nicolas Lapierre, from the A1 France team, takes a corner at the Shanghai International Circuit
There will be two A1 Grand Prix in China in the coming season

The worldwide touring circuit was launched last year with international teams - including China - all driving the same racing car.

Although the series made an overall loss in its first season, the race in Shanghai was well received, and a race in Beijing has been added this season to make China the only two-race hosts for 2006/07.

According to A1 Grand Prix general manager Stephen Watson, its success can be put down to a number of reasons.

"We locked into patriotism, encouraged a female audience, and made sure we had a good local partner - which is so very important. We also ensured we had a good reach in terms of national and city television.

"And we also made sure a national brand was our top sponsor."

Fake balls

However the efforts of sports investors count for nothing if their property, marketing rights, or merchandising are infringed.

Chinese cities are notorious for selling fake Western luxury goods, and logos are routinely reproduced.

During the recent football World Cup it was discovered that French supermarket chain Carrefour was selling fake Adidas footballs in Beijing.

Standing up for your IP rights will enable you to go far in protecting those rights
Rebecca Ordish, Rouse International

Rebecca Ordish, an expert on Chinese intellectual property protection at Rouse International , says: "Some people say it is not worth trying to protect IP in China but protection does work, even having a piece of legal paperwork to wave at the offender can be helpful.

"It is a unique challenge and firms have to have a unique game plan. You have to prepare well, draw up clear contracts, use local advice, invest time and effort in relationships, and be adaptable.

And, as Chen Feng, deputy director of the Bocog 2008 Beijing organising committee points out: "We hope the games will educate the public and businesses about IP issues.

"That will be just one of the legacies from the game, which also offers us a tremendous opportunity to sell China and sport to overseas visitors and firms."

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