Supplement firm inks deal with English soccer club, but such pacts, while trendy, can carry risks

In famous Old Trafford, Robin van Persie, Manchester United's captain, missed three chances to score and had to settle for an equalizer in a 1-1 tie against soccer rival Chelsea on Oct 26.

One day later, however, the legendary English Premier League club scored a new sponsorship from a Chinese company.

The club signed a multiyear deal with nutritional supplement firm IVC, marking its first official Chinese wellness partner. IVC, a leading player in the global nutritional supplement market, has a line of products tailored to the Chinese consumer.

As part of the deal, the company's Mate brand will launch products carrying the Manchester United crest. These include SportMate, a supplement to improve muscle repair and metabolism, and DailyMate, to support immune health and boost energy levels.

"IVC and Manchester United have many things in common," says Chang Liang, president of IVC. "We believe health and nutrition is the key to a person's well-being and Manchester United will help us communicate this to its millions of followers in China."

Founded in 1955 in the United States, IVC produces supplements for leading retailers in the US and nutritional, prescription and over-the-counter products for many global brands. In 2010, Aland (Jiangsu) Nutraceutical Group, from eastern China's Jiangsu province, acquired the company for a reported sum in excess of $63.4 million.

Richard Arnold, Manchester United's group managing director, says: "As a professional sports club we understand the importance of living a healthy lifestyle."

Besides IVC, Manchester United also has deals with China's largest beverage producer, Hangzhou Wahaha Group Co, and China Construction Bank, which are its official partners in China.

In recent years, sponsorship of influential sports events or teams has become popular with Chinese companies.

China's Anta Sports Products Ltd and NBA China in October announced a new partnership, designating Anta as marketing and merchandising partner of NBA China, with a sponsorship fee reaching 200 million yuan per year ($318 million, 255 million euros).

China's NVC Lighting signed a four-year sponsorship agreement with the International Swimming Federation last year. NVC Lighting was named title sponsor of the FINA Diving World Series from 2014-2017.

China-headquartered Yingli Solar, the world's largest solar panel supplier by volume, is one of the eight FIFA World Cup sponsors (a level below partner, of which there are six). It claimed in 2010 to have become the first renewable energy firm and first Chinese company to sponsor the championship.

"The agreements reflect the latest investment from Chinese firms in their branding strategies. Sponsorship of large sporting and cultural events has become a major marketing communications tool," says Hu Yansong, associate professor of marketing at Warwick Business School in the UK.

"Sponsorship is a huge business. It can increase awareness of the brand with actual and potential customers, and improve the firm's image and the brand image of its products," Hu says.

David Arnold, adjunct professor of marketing at London Business School, says he thinks Chinese companies like Wahaha, IVC and China Construction Bank are trying to enhance their brand image in China. Expanding that goal abroad would be a long-term goal.

"One of these Chinese organizations already has good awareness in its target market, so that actually their (current) customers are going to be the main people who are going to be motivated by the association with Manchester United."

Industry sources say that having an affiliation with a successful sports team like Manchester United may help convince consumers that the Chinese brand can be trusted.

"Consumers in a market like China will tend to view a global brand as a guarantee of high quality," David Arnold says.

Yuval Atsmon, a principal in the London office of McKinsey and Company, a top New York-based management consulting firm, cites the Manchester United deal as an example of the growing popularity of UK soccer clubs in emerging markets in general and in China in particular. Atsmon says it provides an opportunity for both the clubs and Chinese sponsors to capture positive consumer attention.

"The clubs certainly want to find ways of getting new revenues from what is the largest and fastest-growing emerging market, and sponsors may find a relatively inexpensive way to capture awareness and add some sparkle to their brand image," Atsmon says.

Brian Millar, director of strategy at Sense Worldwide, a London-based marketing consultancy, notes that affiliation with a sports brand is actually a media channel in itself.

"You are being involved in their social media. You are getting your name out to lots of fans who are watching their digital TV channels. You are buying a media package with these companies," Millar says. "This is a little bit different from having your logo side by side with somebody else's logo. To that extent, it can be a useful shortcut to some sort of global recognition and get over the barriers to enter a new market. We call that 'prompted recognition' in the business."

However, experts also point out the possible challenges for Chinese companies that sign on the dotted line with sports events or teams.

"The key challenge for sports sponsorship," Atsmon notes, "is that benefits are very hard to measure. Unlike advertising on TV, papers or Internet, there are limited reliable ways to measure the number of people they have reached among their target audience, and the impact the advertising had on them. Cross-border partnerships could be even harder to measure."

Furthermore, Hu says, while Wahaha, China Construction Bank and IVC are sponsoring Manchester United, such a move can alienate fans of their opponents, such as Liverpool or Chelsea.

"When you have a global brand like that which has a lot of brands associated with it," Millar says, one of the challenges is "being able to climb out from under some of the bigger and more recognizable brands on top, and enabling and ensuring that you are getting some sort of presence out of it."

Millar says the teams that benefit sponsors the most internationally tend to be teams that are performing really well. If they get less than stellar results for about three years, their global fan base starts to desert them for other teams.

David Arnold agrees. "When you are partnering with a sports team, you are in trouble if they stop winning. That is a danger of dealing with sports. They might hit bad times like Manchester United. They have been at the top forever and then last season and this season they are not so good and they have not qualified for the Champions League. It is even worse in the case of individuals."

For Chinese companies, "partnering with an event is the lower risk, the team is kind of halfway, and an individual is the highest risk," David Arnold says.

Another thing for Asia, Millar notes, is that there is evidence that people follow players as much as they follow teams. "And if a certain number of players leave Manchester United, you might see some of the attrition to that fan base."

Analysts also note that although China is a global economic power, many consumers outside China struggle to name famous Chinese brands.

Patrick Barwise, emeritus professor of management and marketing at London Business School, believes this to be an anomaly. He says the solution for Chinese companies is to focus on quality and associate oneself with other high-quality brands.

"You can either disguise 'Made in China' or you can celebrate it, celebrate it's Chinese," says Barwise.

Laura Davis and Zhang Kexin contributed to this story.

zhangchunyan@chinadaily.com.cn

Manchester United announces a multiyear partnership with IVC as the club's first official Chinese wellness partner on Oct 27. Provided to China Daily

(China Daily European Weekly 11/14/2014 page19)