Fifa’s new corporate sponsors reflect China’s growing pitch for market share in every industry from smartphones to electrical appliances and dairy products
7/17/2018 11:54:02 PM
|written By : Abhijit Nag|
After watching the 2014 World Cup on home theatre in Boston, now in Singapore this correspondent has to be content with this year’s match highlights on YouTube. Put it down to frugality -- the same frugality which prompted Singtel and StarHub to bundle the match telecasts as a special package for which viewers to pay extra. The S$25 million Singapore reportedly paid when Singtel, StarHub and MediaCorp jointly bid for this year’s World Cup broadcasting rights is a drop in the ocean of Singtel’s colossal net profit which soared to a record S$5.45 billion in the year ended March 2018. But still it is charging as much for the match telecasts as StarHub, which posted a more modest net profit of S$249.6 million for the year ended December 2017. While Malaysia’s national broadcaster Radio Televisyen Malaysia (RTM) is showing the majority of the matches live for free, only nine free-to-air matches are being broadcast by Mediacorp on okto.
One could say Singtel and Starhub are taking their cue from modern football, where nothing is given away easily. The 2014 World Cup, where Germany thrashed hosts Brazil 7-1 in the semi-finals, saw a spike in the number of goals, up from 145 in 64 matches played in the 2010 World Cup in South Africa to 171 in the same number of matches played in Brazil. But if you look at Fifa.com statistics, from the 1960s onwards the average number of goals scored per match in the World Cup has been less than three. The sole exception was the 1970 World Cup in Mexico, where three goals were scored per match on average. It ended with Brazil defeating Italy 4-1 in the final, helped by goals from Pele, Gerson, Jairzinho and Carlos Alberto.
Plus ca change. Brazil, Germany, England, Belgium, Sweden, Peru, Uruguay, Mexico, Russia – many of the teams that participated in that World Cup are in action this time, too. A week may be a long time in politics, but not in soccer, where the same clubs seem to play in the Champions League every year and the same countries vie for the quadrennial World Cup. All the footballing powers have made it to Russia with the exception of Italy and the Netherlands, sadly eliminated in the qualifiers.
While many of the same nations are playing in the World Cup this year as four years ago, there have been changes in the surrounding hoopla. If you can tear your eyes away from the action on the field to gaze at the billboards, what do you see? A host of unfamiliar names: Wanda, Hisense, Mengniu, Vivo… We have come a long way since the 2014 World Cup, where the sponsors were mostly Western multinationals. Solar panel manufacturer Yingli, the first Chinese company to sponsor the World Cup – in South Africa in 2010, and again in Brazil in 2014 – has dropped out this time, constrained by a market slump, but a host of others from China have stepped into the breach. The conglomerate Wanda Group, appliance manufacturer Hisense, Mengniu dairy and smartphone maker Vivo figure among the Fifa partners and World Cup sponsors, their names blazoned on billboards at every match, while men’s fashion brand Diking, technology and entertainment company Luci and electric-powered motorcycle, bicycle and scooter maker Yadea have signed up as national supporters, gaining an edge in their domestic markets.
Fifa has not been deserted by all its old sponsors. While Emirates, Sony, Castrol, Continental and Johnson & Johnson have pulled out, Coca-Cola, which has sponsored every World Cup since 1982, continues to be a Fifa partner; so do Adidas, Hyundai-Kia Motors and Visa. Anheuser-Busch (Budweiser) and McDonald’s remain World Cup partners. Besides the old mainstays and fresh sponsors from China, Fifa has found two new partners – Qatar Airways taking the place of Emirates and Russia’s very own Gazprom. But with seven of the 19 corporate sponsors hailing from China, this is the year of the Chinese commercial breakthrough in the World Cup.
China may not have skin in the actual game itself as played on the field. Or does it? With all the Chinese brand names beamed into every home tuned into the games, they are gaining name recognition among the 3.4 billion global audience expected to have watched the World Cup by the time it ends with the grand finale on July 15. And name recognition converts into sales. Shoppers looking for a new smartphone may consider Vivo if their budget does not extend to an iPhone or a Samsung Galaxy Note.
With all the new brand names on display at this year’s World Cup matches, one is reminded of the changes in the smartphone business. In the early days of mobile phones, buyers had a choice of Western and Japanese brands – Nokia, Sony-Ericsson, Blackberry, Motorola… With the advent of smartphones, iPhone and Samsung dominated the upmarket with a clutch of Chinese brands competing in the budget category. Now Chinese brands have gone upmarket, too, with the Huawei P20 Pro billed by the US technology blog Engadget as “the best phone you’ll never buy” because the US government warns against buying Huawei phones owing to security concerns.
America is concerned about China’s growing strength in technology, which is why President Donald Trump blocked Broadcom’s proposed buyout of US chip maker Qualcomm in March because Broadcom at the time was headquartered in Singapore. Broadcom has since moved its headquarters to the United States not to fall foul again of Washington. Not just technology, President Trump is concerned about China stealing a march on America in other businesses and industries, too. That is why he wants to slap tariffs on US$200 billion worth of Chinese goods on top of the US$50 billion worth of tariffs already imposed on imports from China.
With a trade war brewing with America, the world’s largest market, Chinese companies have to ratchet up sales elsewhere – and the World Cup provides the marketing opportunity for just that. Football is more than a game. Politics also casts its shadow over the World Cup. There was outrage in Tehran when the American sportswear company Nike backed out of its commitment to supply football boots to the Iranian national team because of US sanctions against Iran.
Football is a beautiful game but not without its murky side. Emirates, Sony, Castrol, Continental and Johnson & Johnson ceased to be Fifa partners and World Cup sponsors after the Fifa corruption scandal in 2015 when several officials were arrested and indicted following investigations for bribery, fraud and money laundering. The scandal has not prevented others, however, from underwriting the tournament. All said and done, it’s a fabulous business opportunity. Fifa is set to make US$6.1 billion from this year’s World Cup -- US$1.3 billion more than in 2014, reported the New York Times.
No matter what happens off the field, the politics and shenanigans, the fans don’t want to miss the games. This correspondent ran into a young couple living in his block who are just back from a 10-day trip to Russia, which included attendance at the World Cup. More than 2.5 million tickets have been sold for the World Cup, according to the Bleacher Report – over 870,000 to the Russians, followed by the Americans (about 88,000) and the Brazilians (about 72,000). The Chinese, who bought more than 40,000 tickets, also figure on the top 10 list of ticket buyers along with the Germans, Colombians, Mexicans, Argentinians, Peruvians, Australians and the English.
As the American and Chinese presence shows, fans crave the action even if the national team fails to qualify for the World Cup. One doesn’t have to be Portuguese to be mesmerised by the magic of Cristiano Ronaldo – or Argentinian to mourn with Lionel Messi as he hung his head in shame after Croatia trounced Argentina 3-0. The outcome of the World Cup may be as predictable as the dawn, with the trophy invariably lifted either by a European or a South American side, but inside that story are turns and twists – shocking defeats and stunning victories. Whoever thought Germany would lose their opening match 0-1 to Mexico and not even make it to the Round of 16? And while England started favourites against Panama, who ever expected them to crush their opponents 6-1? England have never won such a landslide victory before, ever, in the World Cup. It’s such action and drama that makes the World Cup such a spellbinder. With the tournament still in the group stage as we go to press, this fan quails from any wagers on who will emerge champions. But it’s safe to say the World Cup will roll around again four years from now – and the Chinese are playing for keeps to be a global economic powerhouse.