Chinese companies sign up for Euro 2020 football sponsorship in a bid to go global

Posted on

BEIJING — After home appliance company Hisense de first Chinese sponsor for the UEFA European Football Championship in 2016, three other Chinese companies signed partnerships for this year’s Euro 2020.

These companies pay money to reach overseas markets, while building prestige for shoppers at home worldwide.

“Chinese brands use football not only for local marketing (selling their products to Chinese consumers), but also to open new markets, especially in Europe,” said Pierre Justo, director of international, media and sports at the Kantar consultancy, in an e-mail. mail.

The Chinese government has encouraged homegrown companies to go abroad, while many companies like to boost their brands by selling abroad.

Hisense, based in Qingdao, Shandong province, said it aims to expand overseas markets to generate half of its total revenue, worth about $23.5 billion, by 2025. That’s three times the $7.93 billion it earned abroad during the pandemic last year.

The TV and home appliance maker claims its European sales more than doubled in the first five months of the year from a year ago, helped by a surge in demand for refrigerators in France.

Hisense began invading Europe more than 10 years ago and said it now has more than 8,000 employees on the continent, with offices in Germany, Spain and 20 other countries. The company sponsored the 2018 FIFA World Cup and has signed a deal for 2022.

Another Chinese sponsor, smartphone company Vivo, said it officially entered six European countries in October and claims to have more than 400 million users in more than 50 countries.

Read more about China from CNBC Pro

JPMorgan picks its favorite Chinese stocks on everything from hydrogen to EV batteries

Wedbush says Tesla faces a ‘moment of truth’ in China with recall

Jim Cramer says he feels better about Apple’s exposure to China after Nike earnings Nike

A full list of sponsors for Euro 2020 was not available, but those listed by the Union of European Football Associations on its website include Russian energy company Gazprom, German automaker Volkswagen and US courier company FedEx.

ByteDance’s Alibaba-affiliated Alipay and TikTok are among the other companies paying to have their names rolled around the rim of the stadium behind football players in June and July this year.

The one-month Euro 2020 football tournament, which started on June 11, was postponed due to last year’s pandemic. During the last championship in 2016, 2 billion people tuned in to live television broadcasts, boosted by increased interest from China and Brazil, according to a UEFA report quoted by the Associated Press.

In 2018, Alipay agreed to a eight year partnership that included Euro 2020 and Euro 2024. The deal was: worth 200 million euros ($238.5 million), according to sources quoted by the Financial Times. For Euro 2020, Alipay’s deal includes displaying English and Chinese language versions of its subsidiaries.

UEFA said it was unable to disclose the costs of partnerships with Chinese brands “due to confidentiality clauses”. When CNBC contacted him, Ant declined to confirm the scope of his eight-year partnership agreement.

Alipay, one of the two largest mobile payment providers in China, has sought to expand globally by partnering with overseas merchants and Chinese tourists. The number of Chinese travelers has fallen since the pandemic forced countries to close the borders last year.

China’s fan base

Another Chinese company looking to capitalize on the tournament is iQiyi, which has acquired the online live streaming rights for Euro 2020. Subscriber growth has stalled at just over 100 million, while the company posted another $193.4 million loss in the first quarter.

The deal has attracted “significant” visitor traffic, as well as business partnership opportunities with Volvo, Heineken, Volkswagen and Meituan, Lingxiao Yu, CEO of iQiyi Sports, said in a Chinese statement translated by CNBC.

He does not want to say whether more people have bought a subscription as a result. State broadcaster CCTV has the rights to broadcast the matches live on television.

While Euro 2020 has been one of the hottest topics on Weibo, the Chinese version of Twitter, in recent weeks, it’s unclear how much of the Chinese football market can grow without an international-level team.

Over the past two decades, China has tried unsuccessfully to build its own teams by paying top dollars for foreign players and coaches, Kantar’s Justo said. The only way for China to develop its own football stars is to cultivate a local culture around the sport from below, he said.

The contrast between global interest in football versus China’s can be clearly seen on TikTok.

The official account for Euro 2020 has 2.5 million followers, compared to just 291,000 followers on Douyin – the highly popular Chinese version of the short video and streaming app also owned by ByteDance.

Risks of Partnership with China

China remains a large and growing lucrative market for international sports. After decades of cultivation, the National Basketball Association’s local company is Basketball reached a value of $4 billion in 2018, Deputy Commissioner Mark Tatum told Forbes.

However, working with China comes with its own risks.

In 2019, an NBA-affiliated tweet in support of protesters in Hong Kong prompted mainland companies to suspend their partnerships, at an estimated cost of up to $400 million to the association.

Official video streaming platform Tencent resumed broadcasting most games after a few days, while state broadcaster CCTV stopped broadcasting the games for more than a year, state media said.

Disclosure: CNBC parent company Comcast/NBCUniversal has TV rights to English Premier League football matches.

Leave a Reply

Your email address will not be published. Required fields are marked *

Similar Posts