Slow to get on Chinese bandwagon

Updated: 2012-08-10 10:43

By Mike Bastin (China Daily)

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Slow to get on Chinese bandwagon

Western brands sluggish to take advantages of olympians' success in London

While it is no surprise to see China achieve gold-medal success after success at the London Games, it is surprising that Western brand producers remain reluctant to make use of these Olympian superstars, or are perhaps even oblivious to their brand-building potential.

Brand building is becoming far more emotional; the most successful brands have a personality that resonates with their consumers, so association with successful people and their personalities will be more and more effective, and not just in China and with Chinese consumers.

Chinese sports stars, especially those who attain international success, are far more than elite athletes in the minds of most Chinese brand consumers. Chinese sports stars' athletic prowess and, more importantly for younger Chinese consumers, "cool" physique together with their elite social status afford them tremendous admiration and even idolization. This could not be more true of Sun Yang, the 22-year-old Chinese swimming sensation who has captured two Olympic golds at the London Games. And yet, Coca-Cola ranks as the sole Western brand sponsoring Sun despite more and more Chinese brands taking advantage of his brand-building qualities.

Sports stars in China, especially those who are younger and physically attractive, are also very much seen as fashion icons by typical Chinese brand consumers. It is far easier for a Chinese sports star to stretch a brand image towards "fashion", "cool" and "style", for example, within the minds of Chinese consumers than it is Western brand consumers.

Chinese consumers are also changing, becoming far more knowledgeable and self-confident, and will not simply follow Western brands for much longer. Co-branding initiatives between Western and well-known Chinese brands will, therefore, not only aid awareness of the Western brand across China but also lend the Western brand a certain acceptance and even respect within Chinese society. This will be the case even if there is no apparent "fit" between any two brands which form a co-branding partnership.

However, despite Chinese brands' international emergence and visibility at the London Olympics, many Western brand producers appear slow to appreciate the value of possible co-branding initiatives with emerging Chinese brands. That said, Chinese sports clothing brand Anta has entered into just such a co-branding agreement with a major Western brand at the London Olympics. McDonald's, one of the official sponsors, has equipped its staff with uniforms sporting the Anta brand name and logo. Chinese consumers will be attracted to and will value such an association as a form of respect for China, which will help McDonald's' brand image right across China and not just in first-tier cities.

Anta has also very cleverly designed and tailored a special outfit for the Chinese delegation at the London Games which has been named the "Champion Dragon Outfit". The outfit has been displayed at Procter & Gamble booths and McDonald's restaurants as well as their media platforms to promote the atmosphere of the London Olympics across various parts of China.

It is time for more Western brand producers to seize co-branding opportunities with one or more of the many internationally emergent Chinese brands, and what better place to start than these highly visible Chinese brands at the London Olympics? Western brand producers need look no further for possible partners than the plethora of Chinese brands which are appearing at the London Olympics as kit and/or athlete sponsors, and not just sponsors of Chinese Olympians and Chinese teams.

Billions watching the London Olympics on TV could not help but notice the South African team's kit sponsored by Chinese clothing brand Erke. In fact, the South African Olympics and Paralympics teams' kit was also manufactured by Erke, and the $4 million, four-year agreement extends to the 2016 Games to be held in Rio De Janeiro.

Erke's investment could not have received greater exposure when South Africa's Chad Le Clos surprisingly won gold at the London Olympics, beating US swimming legend Michael Phelps in the 200-meter butterfly. Erke's name and logo were clear for all to see at Le Clos's extremely emotional, eye-catching medal ceremony.

Erke, based in Southeast China's Fujian province, the home of many of China's emerging clothing and shoe brands, also sponsors the Iraqi and Uzbek teams at the London Olympics.

Not to be outdone by Erke's Olympic publicity success, Peak, one of China's leading sports clothing and equipment brands, has managed to secure sponsorship deals with no less then seven Olympic teams at the London Games. Only Nike and Adidas have sponsored more Olympic teams than Peak at the London Games. Peak's sponsorship agreements include the Olympic teams from New Zealand, Lebanon, Slovenia, Jordan and Cyprus. In particular, any Western brand thinking of co-branding agreements with Peak should also be aware of the Chinese company's impressive distribution network across China with nearly 6,000 authorized retail outlets.

In addition, Chinese sports brand 361 could be seen in London as the sponsor of the delegations of North Korea and the Republic of Belarus, as well as swimmer Sun Yang. The company also provided sportswear to the press corps so that people watching the CCTV Olympic broadcasts can always see the brand.

Western brand producers should also note that it is not just in the area of sports clothing and equipment where Chinese brands can be seen at the London Games. Chinese computer producer Acer is one of the official sponsors of the Games and Crystal CG, a Beijing-based computer graphics company, is the official digital-imaging services supplier and one of the 28 third-tier sponsors of the 2012 London Olympic Games.

Finally, and perhaps the most international of China's sports-clothing brands, it is Li-Ning that has secured one of the most impressive sponsorship coups of the London Games. Li-Ning has achieved an exclusive agreement with the US Olympic diving team, a huge credibility, awareness and image boost.

Brand-building success across China for Western companies is still very much in its infancy, with most success occurring either in China's most developed first-tier cities (Beijing, Shanghai, Guangzhou and Shenzhen) and/or the southeastern coastal provinces. However, China's future economic development has to involve second and third-tier cities and other regions across China where many of the Chinese brands are already firmly established but where most Western brands still fear to tread.

Joining forces with one or many of these internationally emerging Chinese brands across China will undoubtedly boost any Western brand producer's competitive position. The "fit" between Chinese and Western brand in any co-branding initiative is of course important but this does not mean that the products or services have to be similar or even complementary. It is the brand-image compatibility that is crucial. Chinese sports brands, therefore, offer very attractive opportunities where association with sports provides an ideal platform for a brand image of "excitement", "fun" and "good health". Hence the McDonald's-Anta tie-up right now in London.

Chinese brands also present any Western brand seeking to expand across China with an established distribution network of retail outlets in which to promote and maybe even sell their branded products.

Western brands will also benefit from co-branding agreements with Chinese brands in first-tier cities, where Chinese consumers will perceive such a tie-up as a demonstration of a long-term commitment to Chinese society and industry as well as an understanding of Chinese consumer culture.

However, by far the most powerful form of co-branding for Western brands in China is the long-term sponsorship of Chinese sports stars and Olympic medalists in particular. Chinese consumers across China's less developed cities and regions will attach even greater significance here than those in first-tier cities.

Spotting and signing such potential world superstars before they achieve international success is probably the most important part of any brand-building campaign across China, for Western and Chinese brand producers. Sun Yang and teenage swimming sensation Ye Shiwen are just two examples of many more to follow.

The author is a researcher at Nottingham University's School of Contemporary Chinese Studies. The views expressed do not necessarily reflect those of China Daily.

(China Daily 08/10/2012 page11)