Sports Celebrity Endorsement in China
In China, sports celebrities have significant influence amongst the Chinese population, especially with the young demographic, which consists 80% of China’s sport market.
Due to the awareness, many Chinese companies in the sport industry have prepared contracts with sports celebrity to let them participate their promotion events or take them as brand ambassadors.
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Special characters of the market
The rule of the game in China is different from other countries as everybody knows. And in sports field, it’s even more.
1. Special system
In China, most decisions are not made by athletes themselves, but by General Administration of Sport of China.
Now the China football, basketball, ping-pong sports have developed their professional organization which means players from them have the rights to make decision with sponsorship by themselves. However, most sports like swimming, tennis, hurdles are still categorized in state-sponsored sport system.
The athletes who practice them have to approval from General Administration of Sport of China before signing contract with sponsors. Usually the income of athletes will be divided into 3 shares: one for General Administration of Sport of China, one for the award for all the athletes and the rest one is for the athlete who gets it. This has aroused more and more conflicts between the administration and athletes.
2. Lack of professional agents
China has a big number of top athletes while only few of them have been developed business-wise. The reason is that there is a lack of professional agents to represent and promote athletes.
Because of the limitation of low level business development, the business value of most top athletes are wasted. And their life consists of only training and competing with out a long term future career plan.
The situation is undergoing a big change now. Yao Ming has formed a team called “Team of Yao” who is responsible for organizing his business events and training as well as balance them. It helps the great Chinese basketball player play well on basketball court and play better in business field. Even after his retirement, Yao still get tens of millions sponsorship every year.
3. Passion of local government
If an athlete performs well, the local government will help promote him and make him popular.
The gold-medal winner of Men’s 400m Freestyle in London, Sun Yang, received a surprise from Hangzhou Municipal government: a statue for him!
In fact, the reason to build a statue for an athlete is a pure show off of performance of the government. Chinese government has great pressure for getting a good performance and a gold medal from Olympic Games is a kind of proof.
4. The limitation of events
Chinese athletes are usually good at small events like badminton and diving, not the popular eye-catching events like football, formula 1 or basketball. This character limits the business value of top Chinese athletes.
Without a new emerging super star, China sports fans have diverted their interest to other events. It’s a special phenomenon in China that those small events also have big groups of fans, especially those events that China has big chance to win such as diving, weighting and ping-pong.
Those athletes with the right look and good performance are quite popular in China, no matter which event they come from.
Things also change that Chinese athletes are becoming more competitive in those big events such as swimming and basketball. This also produces more high business value Chinese athletes.
Trend of the market
More professional, more marketing-oriented and more entertaining are the three characteristic of China’s emerging sports market. In other word, China’s sporting market is becoming more and more business friendly.
It is motivated by several factors. First of all, there will be more sports games or tournament in China in next several years like China Open, Shanghai ATP, F1 and HSBC Golf Roots. It will not only attract more Chinese into sports but also create more top Chinese sports stars.
The increasing maturity of China sports market also attracts more companies from other fields to sponsor sports celebrities. After sporting goods, beverage, real estate, insurance companies are now targeting on those top athletes.
In fact, most companies can find their brand ambassadors in sports fields because top athletes are usually health, strong, confident and diligent.
Selection of Athlete
Before cooperating with sports celebrity to open Chinese market, you have to first select one from them.
There’s a trend now that companies prefer more and more potential athletes. Especially those big companies like Coke Cola and Nike who have invested a lot on potential Chinese athletes before they win gold medals. Now those companies invest not only on athletes themselves, but also on the Administration of Sport of China to get inside information on potential stars.
Those traditionally weak events for Chinese like football and basketball. Yao is the best illustration for that.
The other side of the sports celebrity endorsements is its risk.
1. Cost risk
The cost of inviting a celebrity athlete is not low. And that’s not all, the following cost sometimes can accounts for 80% of total cost. If your budget is not big, take a second thought.
2. Performance risk
According to the data from 2004, only 25% of the athletes endorsed have won gold medals. It greatly undermines the confidence of sponsors.
3. Reputation risk
Scandal problems seldom found in China sports field. However, short “life circle: of celebrity makes many companies headache.
There are also some solutions to hedge the risks.
1. Balance training and business development
Performance of your endorsed athlete is the premise of the effect of your investment. A sole sponsorship can be a good solution. Athlete can concentrate on his training and it also saves company from worrying about its competitors.
2. Backup ads solution
The sports game is a test for both athletes and companies. Nobody can guarantee results. So to prepare backup ads can keep companies from embarrassment.
3. Seasonal change of celebrity athletes
There’s always risk of a long term sponsorship with one athlete. Even if there is no risk, sports fans are more fickle in their affections.
Sponsor more athletes
To reduce the high uncertainty of sports games, more and more companies choose to sponsor an entire team. It can help company understand athletes more; establish long time cooperation; reduce the cost of sponsoring single athlete in the future.
What’s your brand culture? What kind of athlete you need?