Although the FIFA World Cup 2018 is mainly about European and Latin American countries that dominate the top ten of the FIFA worldwide rankings, Asia is dominating in a playing field that is directly related to the World Cup football 2018, but is not quite in the spotlight, especially China.
China is a country that is not well known for its great football team. Nevertheless, the country, which is led by the communist party, invests large amounts of funds on a yearly basis to further develop football in the country. Xi Jinping is a large fan of football and can only wish that China will dominate football stadiums one day. China is present on the 75th place of the FIFA rankings, while it has 1.4 billion inhabitants. Xi Jinping has defined a goal that China will qualify itself for the next World Cup tournament.
Moreover, it wants to organise the World Cup in the upcoming decades, potentially 2030 or 2034, as Canada, Mexico and the United States claimed the spot for 2026, and states that China wants to be the world champion by 2050. The almighty leader came up with a master plan where China wants to have 20.000 football training centres and 70.000 football fields by 2020. Ambitious goals for now and China has still a long path to go before it will possibly reach its goal. At the moment of writing, there is another area, related to football, where China already dominates the football industry, namely tournament sponsoring. This article will give insights into the massive amounts China invests in sponsoring around the World Cup 2018 and what the precise reason is behind this?
Recently, China is having a dominant role in the sponsorship of the FIFA World Cup 2018. China is the main sponsor in terms of sponsor income for the football tournament in Russia, especially Chinese firms donate a considerable amount of funds to the World Cup in Russia.
It seems Wanda is donating funds in the form of sponsorships purely for a reputational reason
When watching the football matches that are frequently broadcasted worldwide, it can be seen that names, like Wanda (Chinese state owned real estate and entertainment conglomerate that will sponsor the coming three World Cup’s) dominates the sponsor boards around the football field. It seems Wanda is donating funds in the form of sponsorships purely for a reputational reason. The conglomerate wants to show the outside world that business is going in a positive direction and that promising returns on the investments are on the way.
Hisense, Vivo and Mengniu
In the firms’ view, the World Cup 2018 is the perfect way to reach a large (Western) audience. Moreover, other names like Hisense, Vivo and Mengniu are visible on the sponsor boards as well. All those brands have two similarities, namely that they want to spread their brand around the globe and show the outside world that they are a leading brand. Furthermore, all the aforementioned brands are Chinese.
The total sponsor income for the FIFA for this World Cup cycle is tremendously high. From the period between 2011-2014, from the first qualification match until the end tournament of 2014, 1.6 billion USD was captured in terms of sponsor funds. Currently, it is estimated that sponsor funds will be around 1.45 billion USD.
Especially, Chinese investors fill the sponsor gap that occurred when companies as Johnson & Johnson and Sony terminated their sponsorship, since these companies did not want to be related with the corruption affair linked to the FIFA back in 2014. Still, it can be seen that overall sponsor income is 9.38% lower compared to 2014. This is mainly related to the aforementioned corruption affair.
More than a third
According to Nielsen (a well-known global market research firm), Asia – mainly China – has a 39% stake in terms of sponsorship agreements related to the FIFA World Cup 2018. It is estimated that China has 855 million USD out of the total 2.4 billion USD in terms of sponsor donations and commercial agreements. This is indeed more than a third of all sponsor and advertisements income for Russia. Moreover, the World Cup 2018 has a widespread reach to more than 3 billion people.
Consequently, it can be stated that the World Cup football is among the best watched events in the world. Chinese companies mainly make use of this to further spread their brand name with in the end rapid growth as underlying final goal – increase the value of Chinese brands and prices of products.
The World Cup 2018 has a widespread reach to more than 3 billion people
Additionally, Xi Jinping wants to make football more famous in the country itself and by heavily promoting football nationally and internationally, more Chinese people will prefer football as well that brings China one step closer to qualifying itself for the next World Cup. This year 40,000 tickets were sold to Chinese people while 4 years ago this number was only 7,400 tickets. It seems Xi’s master plan is slightly working.
Philippe Le Floc’h, FIFA’s Chief Commercial Officer, said the following to CGTN America: “Its companies were initially focusing on the domestic market. But now they understand or they have come to the point where they control the domestic market and they want to go abroad. And there was a bit of a natural fit with the biggest sport on Earth. The property has a global footprint. And it was easy for them to go abroad using the most famous sport on Earth.”
The above quote from Le Floc’h says it all, China is dominating the World Cup sponsorship and wants to rapidly increase brand awareness around the globe during the upcoming years. Step by step the dragon is conquering the world in terms of brand expansion. This is also visible from the graphs presented below.
From the above two graphs, it can be seen that Asia and particularly China has been taking a dominant position in terms of sponsorship regarding World Cup football over the last decades. While China had zero influence in 2010, the dragon tremendously increased its sponsorship position over the last eight years.
On the contrary, all other continents and countries remained constant or even decreased in terms of sponsorship position over the same time period. Like mentioned before, corruption is the crucial influential behind this.
In short, it can be said that China has no chance of winning the World Cup 2018 in Russia, as they did not qualify. Nevertheless, China is dominating the World Cup on the side line of each and every single Russian football stadium, making China the most crucial player in terms of sponsorships.
Xi Jinping has major plans with the country in terms of football development. The organization of the World Cup in 2030 or 2034, the qualification for the next World Cup in Canada, Mexico and the United States and the process of becoming the world champion by 2050 are all Xi’s ambitious targets for the upcoming years.
If Xi is as successful with ‘real’ football as he is with expanding its domestic brands by means of sponsorship deals, China has a considerable chance of obtaining the world champion title by 2050. It is quite wise to narrowly follow China during the upcoming years when it comes to football and further sponsorship agreements, especially for European and Latin American countries, as China will probably more and more dominate the beautiful world of football.