Celebrity Athlete Endorsement in China

Sports Celebrity Endorsement in China

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In China, sports celebrities have a significant influence on the Chinese population, especially the young demographic, which consists of 80% of China’s sports market.
Due to this awareness, many Chinese companies in the sports industry have prepared contracts with sports celebrities to let them participate in their promotion events or take them as brand ambassadors.

Special characters of the market

The rule of the game in China is different from other countries as everybody knows. And in the sports field, it’s even more.

1. Special system

In China, most decisions are not made by athletes themselves, but by the General Administration of Sport of China.
Now China football, basketball, and ping-pong sports have developed their professional organization which means players from them have the right to make decisions with sponsorship by themselves. However, most sports like swimming, tennis, and hurdles are still categorized in the state-sponsored sports system.

The athletes who practice them have to approval from the General Administration of Sport of China before signing contracts with sponsors. Usually, the income of athletes will be divided into 3 shares: one for the 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 a 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 is wasted. And their life consists of only training and competing without 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 balancing them. It helps the great Chinese basketball player play well on the basketball court and play better in the business field. Even after his retirement, Yao still gets tens of millions in sponsorship every year.

3. Passion for 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 the Hangzhou Municipal government: a statue for him!

In fact, the reason to build a statue for an athlete is a pure show off of the performance of the government. The 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 superstar, 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 a 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 Chinese athletes are becoming more competitive in those big events such as swimming and basketball. This also produces more high business value, for Chinese athletes.

Trends of the market

More professional, more marketing-oriented, and more entertaining are the three characteristics of China’s emerging sports market. In another 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 tournaments in China in the 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’s sports market also attracts more companies from other fields to sponsor sports celebrities. After sporting goods, beverages, and real estate, insurance companies are now targeting those top athletes.

In fact, most companies can find their brand ambassadors in sports fields because top athletes are usually healthy, strong, confident, and diligent.

Selection of Athlete

Before cooperating with sports celebrities to open the 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 in potential Chinese athletes before they win gold medals. Now those companies invest not only in athletes themselves but also in the Administration of Sport of China to get inside information on potential stars.

Those traditionally weak events for the Chinese like football and basketball. Yao is the best illustration for that.

Risk

The other side of 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 account for 80% of the 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 are seldom found in China’s sports field. However, the short “life circle: of celebrity makes many companies a headache.
There are also some solutions to hedge the risks.

1. Balance training and business development

The performance of your endorsed athlete is the premise of the effect of your investment. A sole sponsorship can be a good solution. Athletes can concentrate on their training and it also saves the 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 preparing backup ads can keep companies from embarrassment.

3. Seasonal change of celebrity athletes

There’s always the 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 companies understand athletes more; establish long time cooperation; reduce the cost of sponsoring single athletes in the future.

What’s your brand culture? What kind of athlete do you need?