{"id":52908,"date":"2014-06-17T22:22:42","date_gmt":"2014-06-18T02:22:42","guid":{"rendered":"http:\/\/countingpips.com\/?p=52908"},"modified":"2014-06-17T22:22:42","modified_gmt":"2014-06-18T02:22:42","slug":"the-world-cup-fever-is-on-for-chinese-emerging-markets","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/06\/the-world-cup-fever-is-on-for-chinese-emerging-markets\/","title":{"rendered":"The World Cup Fever is On for Chinese Emerging Markets"},"content":{"rendered":"
June 17, 2014<\/div>
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By MoneyMorning.com.au<\/u><\/a><\/p>\n

It’s World Cup<\/strong> time, so set your clock to early in the morning.<\/p>\n

There is just no resisting the soccer fever. That is why I think soccer is the most international sport and the most watchable sport. There is nothing like watching your favourite team in action with a room of equally fanatic friends.<\/p>\n

And don’t forget to bring along a cold beer!<\/p>\n

This is where globalisation<\/a> is at its best.<\/p>\n

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Hopeless sport<\/strong><\/h2>\n<\/p>\n

It’s hard to imagine, but Chinese people are soccer fanatics as well. They are as ‘crazy’ about soccer as anyone.<\/p>

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The problem is that it’s hard to root for Chinese soccer, because the national team is so bad. The Chinese national team only broke into the World Cup once, and didn’t stay in the tournament long.<\/p>\n

Mind you, I’m strictly talking about the Chinese male soccer team, not the female team. The female team ranks 17th in the world, and has been among the top five in the world. It’s the male team that delivers nothing but disappointment.<\/p>\n

There are a few counter-intuitive phenomena about Chinese soccer that are tough to understand.<\/p>\n

Chinese athletes are pretty good at sports, especially after getting state government training for 10 or more years. China<\/strong><\/a> can usually score third place in the medal tables at the Olympics, after the United States and Russia.<\/p>\n

But even though the same intense training and (much more) money is thrown at the soccer team, the result is terrible.<\/p>\n

So the most asked question in China is, how is it that out of 1.35 billion people, China can’t create a team of capable soccer players? There are many theories to try to explain this, but I’m almost inclined to believe that soccer just isn’t in the Chinese genes.<\/p>\n

Much like why Chinese are good at table tennis and badminton, there is just no explaining it. So, when there is a major breakthrough in sport, such as in tennis, there is a huge gain in national pride.<\/p>\n

Another occurrence that is almost upsetting to Chinese sports fans is that Chinese soccer receives and makes much more money than any other sport in China.<\/p>\n

This is because Chinese soccer has made itself into an industry, modelled after the European soccer leagues and tournaments. Chinese soccer, being the least deserving institution, has been able to capitalise on the popularity of soccer and continues to profit despite the curses and ridicules of the Chinese population.<\/p>\n

Not to mention the huge amount of corruption in Chinese soccer.<\/p>\n

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The brewers<\/strong><\/h2>\n<\/p>\n

I can go on for hours about the poor state of Chinese soccer. But I won’t. More interesting, in a commercial sense, is the relationship between beer brewers and world soccer events.<\/p>\n

When it comes time for big sporting events such as the World Cup, brewer sponsorship and advertising isn’t far behind.<\/p>\n

Anheuser-Busch InBev [EBR:ABI]<\/strong>, the world’s largest brewer with 25% of global market share, is at it again. A usual sponsor of the World Cup, Anheuser-Busch InBev has brought a Chinese brewer with it this time.<\/p>\n

Harbin beer, now under the management of Anheuser-Busch InBev, is sponsoring the World Cup for the second time.<\/p>\n

Harbin Brewery is only the fourth largest brewery in China, but it’s also the oldest brewery in China. Harbin Brewery can trace its history to 1900, from Russian and Polish origin. This is even earlier than Tsingtao Beer, which German settlers founded in Qingdao in 1903. <\/p>\n

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Brand war for Emerging Markets<\/strong><\/h2>\n<\/p>\n

Anheuser-Busch InBev has stepped up Harbin’s promotion budget this World Cup, doubling what it spent during the last World Cup.<\/p>\n

And although the other brewers in China aren’t sponsoring the World Cup, a brand war is happening domestically<\/a>. Consumer research demonstrates that Chinese soccer fans believe beer and the World Cup go hand in hand.<\/p>\n

Tsingtao Brewery Co Ltd [HKG:0168]<\/strong> has released two new products in the past few months, a soccer themed gift bag and a soccer mug. The brewer is also spending more on online promotion this time around. Tsingtao beer has released a World Cup themed app online<\/a>, connecting over 50 million users. The brewer has also set up beer gardens, serving drinks, food and music to accompany the live broadcasting of the World Cup.<\/p>\n

Another firm, Snow Beer, has authorised provincial subsidiaries to organise their own promotional events. And Yanjing Beer is running online campaigns on Sina.com.<\/p>\n

The truth is, sporting event promotions don’t lead to dramatically higher short term sales. Rather, the ‘game’ is in the making of brand value and enhancing brand positioning. This has a much longer and more profound effect on a company.<\/p>\n

Tsingtao has said that sports promotion is a long term project for the company. Tsingtao officially kicked off its sports promotion in 2005. During this period, it was able to build a ‘young brand’ image and a ‘celebration brand’ image. These have had a big impact on sales over the long run.<\/p>\n

This is a crucial point for analysts and investors<\/a>. Brand value is a key factor to a brewer’s long term viability. A good brewer will relentlessly fight for a spot in the brand war.<\/p>\n

In the years following the World Cup we’ll get to see which brand has ‘won’.<\/p>\n

Ken Wangdong+<\/a>
\n Emerging Markets Analyst, Money Morning<\/em><\/strong><\/p>\n

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\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au It’s World Cup time, so set your clock to early in the morning. There is just no resisting the soccer fever. That is why I think soccer is the most international sport and the most watchable sport. There is nothing like watching your favourite team in action with a room of equally fanatic […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-52908","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/52908","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=52908"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/52908\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=52908"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=52908"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=52908"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}