Chinese companies achieve top turnover at World Cup after team failures | Qatar World Cup 2022

Kuala Lumpur, Malaysia – China may not send a team to Qatar, but Chinese firms will have top billing as sponsors at the 2022 World Cup.

Chinese brands are the biggest sponsors of the tournament, even surpassing the list of American companies which includes iconic names such as Coca-Cola, McDonald’s and Budweiser.

Chinese sponsors have earmarked $1.395 billion for the competition, which will run from Nov. 20 to Dec. 18, surpassing the $1.1 billion spent by U.S. companies, according to Global Data, a data analytics and consultancy firm based in London.

Breakdown on an annual basis, the Chinese sponsorship is valued at $207 million annually, compared with offers from Qatar and the United States valued at $134 million and $129 million, respectively, according to the data.

China’s corporate dominance of the competition reflects its brands’ aspirations 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 turning China, which made its only World Cup appearance in 2002, into a football powerhouse through ambitious plans and goals, such as increasing the number of schools with soccer fields by 2025.

While the 2022 tournament’s four Chinese sponsors – Wanda Group, Vivo, Mengniu Dairy and Hisense – have relatively low profiles outside their home country, they are large enterprises with multibillion-dollar revenues and thousands of employees.

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

“The World Cup works for Chinese companies both outside and inside China as football has a huge following with the Chinese public,” Singapore-based branding expert and consultant Martin Roll told Al Jazeera .

“It strongly signals that these Chinese brands are playing on a global scale and show that 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 a part of it is a testament to the aspirations of Chinese brands.”

Chinese companies are hoping an association with the beautiful game can help them shed negative perceptions about the ‘made in China’ label, said Paul Temporal, branding expert at Oxford University’s Saïd Business School.

“Sports sponsorships allow Chinese brands to connect with a global audience that shares the universal love of sporting experiences in emotional contexts. Football crosses all cultural borders and offers a huge global reach” Temporal told Al Jazeera.

“Chinese brands have learned from their Western counterparts that while it is expensive to gain entry to the world’s best 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 they are successful in terms of global market share, they can have a positive effect on the domestic brand image.”

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The largest Chinese sponsor in Qatar by far is Wanda Group, one of seven FIFA Official Partners – the highest level of sponsorship – along with Coca-Cola, Adidas, Hyundai, Kia, Qatar Airways, QatarEnergy and Visa.

The Beijing-based conglomerate, which has investments in real estate, entertainment, media, manufacturing and financial services, has committed $850 million under a 15-year deal covering all World Cup events through 2030. according to Global Data.

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

Mengniu, which is based in Hohhot, Inner Mongolia, and Hisense, an electronics maker based in Qingdao, have pledged to spend about $60 million and $35 million, respectively.

“Many Chinese companies have grown globally by acquiring foreign brands. Lenovo and Haier have taken this approach as well as building their own brands,” Carlos Torelli, a marketing professor at the University of Illinois at Urbana-Champaign, told Al Jazeera, referring to China’s popular personal computer and consumer electronics brands. .

“This makes it easier to penetrate global markets with an established brand. However, many other Chinese brands are trying to build their brands and events like the World Cup are perfect for creating awareness among a large audience. Participation in these events can facilitate future market expansions.”

While solar panel maker Yingli Solar became China’s first sponsor of the World Cup at the 2010 tournament in South Africa, Chinese companies started making their presence known in a big way at the 2018 competition in Russia.

After leading brands, including Sony, Emirates and Johnson & Johnson, dropped out of FIFA in 2014 and 2015 due to allegations of corruption in the bidding process for Russia and Qatar tournaments, Chinese companies filled the deficit financing.

Shortly after Wanda Group signed its mega-sponsorship deal in 2016, company founder Wang Jianlin said the disputes were “an opportunity” for Chinese firms that previously may never have had the chance to support the tournament “even if we wanted to”.

Wang Jinlin
Wanda Group founder Wang Jianlin described FIFA controversy as an ‘opportunity’ for Chinese brands [File: Thomas Peter/Reuters]

No fewer than seven Chinese companies sponsored the 2018 competition, spending an estimated $835 million, far more than US and Russian brands.

Chinese companies maintained their strong performance at Copa América 2021, the largest soccer tournament in South America, by making up three of the four official sponsors.

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

Ahead of Qatar 2022, Chinese brands have once again proved more reluctant to enter human rights debates than their corporate counterparts elsewhere.

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

The Qatari government has said it has made “substantial progress” on labor reforms and continues to work with non-governmental organizations (NGOs) to “ensure 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 about their endorsement, so they may have been more reluctant to join as a sponsor,” Roll said.

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

“There is controversy over the staging of the World Cup in Qatar. However, would Coca-Cola pull out and risk Pepsi stepping in? Currie told Al Jazeera.

“Would Visa give up its position and allow Mastercard to come back? The motor vehicle category is extremely competitive and any number of global automakers would like to take over from Hyundai Kia. The same can be said for many other product categories. The simple fact is that World Cup deals are done across multiple World Cups and are designed to shut out competitors and provide major 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 “look for ways to build a stronghold beyond the homeland.”

“This is no different than a parallel trend of Chinese brands signing endorsement deals with Hollywood,” Gardner told Al Jazeera, pointing to product placements involving Vivo, Tencent QQ instant messaging and e-commerce firm Jingdong.

“Reminiscent of the many Marvel and DC movies with labels like Vivo and QQ and plastering the Jingdong logo on imaginary skyscrapers on the big screen.”

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