China’s businesses get top billing at World Cup after team flops | Qatar World Cup 2022

Kuala Lumpur, Malaysia – China may not send a team to Qatar, but Chinese companies will be the main sponsors of the 2022 World Cup.

Chinese brands are the main sponsors of this month’s tournament, surpassing even the list of American companies that include iconic names such as Coca-Cola, McDonald’s and Budweiser.

Chinese sponsors have paid $1.395 billion for the competition, which runs from November 20 to December 18, surpassing the $1.1 billion spent by American companies, according to Global Data, an analytics and consulting firm. London-based data.

Broken down on a yearly basis, Chinese sponsorship is valued at $207 million a year, compared to Qatari and US deals worth $134 million and $129 million respectively, the data showed.

The dominance of Chinese companies in the competition reflects the aspirations of its brands to expand their recognition overseas to a level that matches their growing size and reach.

The rise of Chinese sponsors also parallels President Xi Jinping’s dream of transforming China, which made its only World Cup appearance in 2002, into a football powerhouse through ambitious plans and goals, such as multiplying by 10 the number of schools with football pitches by 2025. .

While the four Chinese sponsors of the 2022 tournament – ​​Wanda Group, Vivo, Mengniu Dairy and Hisense – have relatively low profiles outside their home countries, they are huge companies with multi-billion dollar revenues and thousands of employees.

Wanda Group, an industrial conglomerate founded in 1988, and Mengniu, one of China’s largest dairy producers, have each made the Fortune 500 list multiple times.

Wanda advertisement on the sidelines of a football pitch.
Chinese companies such as Wanda Group are among FIFA’s biggest sponsors [File: Maxim Shemetov/Reuters]

“The World Cup works for Chinese companies both outside but also inside China, because football has a large following among Chinese audiences,” said Martin Roll, a strategy expert from China. Singapore-based brand and consultant to Al Jazeera.

“It’s a clear indication that these Chinese brands are playing globally and showing that to the Chinese audience plays an important role. Being a sponsor and marketing partner of the World Cup is only for a select few brands that can afford it, so just being part of it speaks to the aspirations of Chinese brands.

Chinese companies hope that an association with the beautiful game will help them shake off negative perceptions of the “made in China” label, said Paul Temporal, a branding expert at the University of Said Business School. ‘Oxford.

“Sports sponsorships allow Chinese brands to connect with global audiences who share a universal love of sports experiences in emotional contexts. Football crosses all cultural boundaries and offers massive global reach,” Temporal told Al Jazeera.

“Chinese brands have learned from their Western counterparts that, although expensive to access the world’s top events, sports sponsorships deliver long-term results for both brand owners and the nation. Brands that go global are brand ambassadors for China and, if successful in terms of global market share, can have a positive effect on the national brand image.

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By far the biggest Chinese sponsor in Qatar is Wanda Group, one of FIFA’s seven official partners – the highest level of sponsorship – alongside Coca-Cola, Adidas, Hyundai, Kia, Qatar Airways, QatarEnergy and Visa.

The Beijing-based conglomerate, which invests in real estate, entertainment, media, manufacturing and financial services, has committed $850 million under a 15-year deal that covers all Cup events of the world until 2030, according to Global Data.

Vivo, a consumer electronics company based in the southern city of Dongguan, is spending around $450 million under a six-year deal that included the 2017 Confederations Cup and the 2018 World Cup.

Mengniu, headquartered in Hohhot, Inner Mongolia, and Hisense, a Qingdao-based electronics maker, pledged to spend about $60 million and $35 million, respectively.

“Many Chinese companies have expanded globally by acquiring foreign brands. Lenovo and Haier have taken this approach in addition to building their own brand,” Carlos Torelli, professor of marketing at the University of Illinois at Urbana-Champaign, told Al Jazeera, referring to popular brands in personal computers and consumer electronics in China.

“It makes it easier to enter global markets with an established brand. However, many other Chinese brands are trying to create their own brands, and events like the World Cup are perfect for raising awareness among a large audience. Attending these events can facilitate future market expansions. »

As solar panel maker Yingli Solar became China’s first World Cup sponsor at the 2010 tournament in South Africa, Chinese companies have started to make their presence known at the 2018 competition in Russia.

After major brands including Sony, Emirates and Johnson & Johnson abandoned FIFA in 2014 and 2015 amid allegations of corruption in the bidding process for tournaments in Russia and Qatar, the companies Chinese companies have filled the financing gap.

Shortly after Wanda Group signed its mega-sponsorship deal in 2016, company founder Wang Jianlin said the controversies had been an “opportunity” for Chinese companies that may not have never had the chance to support the tournament “even if we wanted to”.

Wang Jianlin
Wanda Group founder Wang Jianlin described the FIFA controversy as an “opportunity” for Chinese brands [File: Thomas Peter/Reuters]

No less than seven Chinese companies sponsored the 2018 competition, spending around $835 million, far more than American and Russian brands.

Chinese companies maintained their strong performance at the 2021 Copa América, South America’s biggest soccer tournament, constituting three of the four official sponsors.

Kuaishou, TCL Technology and Sinovac found themselves shouldering the bulk of sponsorship duties after several major sponsors, including Mastercard and Diageo, pulled out amid controversy over the health risks posed to players by COVID- 19.

Ahead of Qatar 2022, Chinese brands were again more hesitant to engage in human rights debates than their counterparts elsewhere.

Unlike Budweiser, Adidas, Coca-Cola and McDonald’s, Chinese sponsors have not voiced support for a Human Rights Watch campaign calling on FIFA and Qatar to compensate migrant workers and their families for deaths and injuries occurred during the preparations for the World Cup.

The Qatari government says it has made “substantial progress” on labor reforms and it continues to work with non-governmental organizations (NGOs) to “ensure that these reforms are far-reaching and effective”. Qatari officials have also denied allegations of corruption in their World Cup bid.

“Many global brands are careful not to get into a political debate over their support, so they may have been more hesitant to join as sponsors,” Roll said.

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Nigel Currie, director of sports marketing and sponsorship agency NC Partnership, however, said major sponsors around the world were ultimately choosing to stick with the tournament because of the huge business opportunities involved.

“There is controversy surrounding the hosting of the World Cup in Qatar. However, would Coca-Cola pull out and risk Pepsi intervening?” Currie told Al Jazeera.

“Would Visa abandon its position and allow Mastercard to return? The motor vehicle category is extremely competitive and a number of global automakers would like to take over from Hyundai Kia. The same argument can be made for several other product categories. The simple fact is that World Cup deals are made across multiple World Cups and are designed to exclude competitors and provide big brands with an exclusive and elite opportunity to reach billions of people around the world.

Josh Gardner, CEO and co-founder of China-focused consultancy Kung Fu Data, said he expects Chinese brands to continue to grow in international prominence as they “seek ways to build a stronghold beyond the homeland”.

“It’s not unlike a parallel trend for Chinese brands to strike sponsorship deals with Hollywood,” Gardner told Al Jazeera, pointing to product placements involving Vivo, Tencent instant messenger QQ and e-commerce company Jingdong.

“Remember the many Marvel and DC movies featuring labels like Vivo and QQ plastering the Jingdong logo on fictional skyscrapers on the big screen.”

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