CHINESE BRANDS TO THE WORLD CUP RESCUE

20th June 2018

So the World Cup is in full swing. After a four-year wait, it’s good to have the planet’s biggest sporting event (alongside the Olympics, of course) finally back with us. The world is watching.

FIFA will no doubt be delighted about its arrival, given the tournament is a mega money spinner for world football’s governing body and the fact that it accounts for the majority of its sponsorship revenue in each four-year financial cycle leading up to every World Cup.

Yet securing sponsorship for the 2018 World Cup in Russia has been something of a struggle for FIFA. What would usually be a routine process in which the globe’s biggest brands queue up around the block for a piece of the pie and to be part of the spectacle has, on this occasion, instead seen a host of companies pull out of the tournament and end their association with FIFA following the 2015 corruption scandal within the governing body. Political controversies involving host nation Russia in recent years have also not helped FIFA’s case.

So while some heavyweights such as Coca-Cola and Adidas may have remained, long-term FIFA backers including Johnson & Johnson, Castrol and Continental have all done a runner. The 2018 World Cup has been a hard sell for FIFA.

This provides quite the case study. No matter how big your brand or how popular the product is you’re selling, if your brand’s reputation has been tarnished, clients will be less likely to want to work with you. FIFA’s sponsorship revenue has fallen, as a result, from a reported $1,629 million to a predicted $1,450 million between this year’s World Cup and the tournament in Brazil four years ago.

Every cloud has a silver lining, though, and for FIFA that silver lining comes in the shape of Chinese investment. Recognising a gap in the market, and inspired by the recent government-backed football boom in China, Chinese brands have come to FIFA’s rescue.

Alongside FIFA’s seven official partners for the World Cup, Coca-Cola, Adidas, Gazprom, Qatar Airways, Visa and Hyundai/Kia – companies that have invested vast sums into football in recent years – you’ll now find China’s largest commercial property company, the Wanda Group, while three of the tournament’s official five sponsors, TV and fridge maker Hisense, smartphone developer Vivo and dairy firm Mengniu, are all Chinese.

More than just Chinese sponsors, Asian sponsors of the World Cup in general are growing. Sharing 39% of the sponsorship deals for this year’s tournament, Asian brands have the most presence at the 2018 World Cup. That trend is set to continue in four years’ time for the next World Cup, with Qatar due to host the tournament and Middle Eastern brands likely to seek to capitalise on the region’s first ever staging of the event.

With FIFA also having attempted to move on from the dark days of its corruption scandal, having since introduced modernising reforms of the game, including the introduction of new standards for transparency and governance within the governing body, it could well return to growth within sponsorship revenue in the cycle leading up to 2022.

But this still all serves as a warning to any brands out there: keep your house in order, no matter the success of your product

Chinese brands to the world cup rescue

CHINESE BRANDS TO THE WORLD CUP RESCUE

20th June 2018

Chinese brands to the world cup rescue

So the World Cup is in full swing. After a four-year wait, it’s good to have the planet’s biggest sporting event (alongside the Olympics, of course) finally back with us. The world is watching.

FIFA will no doubt be delighted about its arrival, given the tournament is a mega money spinner for world football’s governing body and the fact that it accounts for the majority of its sponsorship revenue in each four-year financial cycle leading up to every World Cup.

Yet securing sponsorship for the 2018 World Cup in Russia has been something of a struggle for FIFA. What would usually be a routine process in which the globe’s biggest brands queue up around the block for a piece of the pie and to be part of the spectacle has, on this occasion, instead seen a host of companies pull out of the tournament and end their association with FIFA following the 2015 corruption scandal within the governing body. Political controversies involving host nation Russia in recent years have also not helped FIFA’s case.

So while some heavyweights such as Coca-Cola and Adidas may have remained, long-term FIFA backers including Johnson & Johnson, Castrol and Continental have all done a runner. The 2018 World Cup has been a hard sell for FIFA.

This provides quite the case study. No matter how big your brand or how popular the product is you’re selling, if your brand’s reputation has been tarnished, clients will be less likely to want to work with you. FIFA’s sponsorship revenue has fallen, as a result, from a reported $1,629 million to a predicted $1,450 million between this year’s World Cup and the tournament in Brazil four years ago.

Every cloud has a silver lining, though, and for FIFA that silver lining comes in the shape of Chinese investment. Recognising a gap in the market, and inspired by the recent government-backed football boom in China, Chinese brands have come to FIFA’s rescue.

Alongside FIFA’s seven official partners for the World Cup, Coca-Cola, Adidas, Gazprom, Qatar Airways, Visa and Hyundai/Kia – companies that have invested vast sums into football in recent years – you’ll now find China’s largest commercial property company, the Wanda Group, while three of the tournament’s official five sponsors, TV and fridge maker Hisense, smartphone developer Vivo and dairy firm Mengniu, are all Chinese.

More than just Chinese sponsors, Asian sponsors of the World Cup in general are growing. Sharing 39% of the sponsorship deals for this year’s tournament, Asian brands have the most presence at the 2018 World Cup. That trend is set to continue in four years’ time for the next World Cup, with Qatar due to host the tournament and Middle Eastern brands likely to seek to capitalise on the region’s first ever staging of the event.

With FIFA also having attempted to move on from the dark days of its corruption scandal, having since introduced modernising reforms of the game, including the introduction of new standards for transparency and governance within the governing body, it could well return to growth within sponsorship revenue in the cycle leading up to 2022.

But this still all serves as a warning to any brands out there: keep your house in order, no matter the success of your product

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2018-09-03T11:13:57+00:00