Chinese companies sign up UEFA Euro 2020 soccer sponsorships

Football fans watch the UEFA Euro 2020 Championship Group A match between Wales and Switzerland in a pub on June 12, 2021 in Shanghai, China.

Chen Yuyu | Visual China Group | Getty Images

BEIJING – After home appliance manufacturer Hisense became the first Chinese sponsor of the UEFA European Football Championship in 2016, three more Chinese companies signed partnerships for this year’s Euro 2020.

These companies pay their price to reach overseas markets while building global prestige for home buyers.

“Chinese brands use football not only for local marketing (selling their products to Chinese consumers), but also to open up new markets, especially in Europe,” says Pierre Justo, Managing Director International, Media and Sports at the consulting firm Kantar, in an email.

The Chinese government has encouraged local businesses to go overseas, while many businesses are eager to strengthen their brands by selling overseas.

Hisense, based in Qingdao, Shandong Province, said the company aims to generate half of its total overseas sales, valued at about $ 23.5 billion, by 2025. That’s triple the $ 7.93 billion it made overseas during last year’s pandemic.

The television and appliance maker claims that its sales in Europe more than doubled in the first five months of the year from a year earlier, aided by increasing demand for refrigerators in France.

Hisense began to penetrate Europe over 10 years ago and today has more than 8,000 employees on the continent with offices in Germany, Spain and 20 other countries. The company sponsored the 2018 FIFA World Cup and has signed a contract for 2022.

Another Chinese sponsor, smartphone company Vivo, said it officially entered six European countries in October and claims it has more than 400 million users in more than 50 countries.

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A full list of Euro 2020 sponsors was not available, but the sponsors the Union of European Football Associations lists on its website include Russian energy company Gazprom, German automaker Volkswagen and US express delivery company FedEx.

Alipay, a subsidiary of Alibaba, and ByteDance’s TikTok are among the other companies paying to have their names roll behind the soccer players along the stadium in June and July this year.

The one-month football tournament Euro 2020, which started on June 11, has been postponed due to last year’s pandemic. During the last championship in 2016, 2 billion people watched live TV coverage, fueled by increased interest from China and Brazil, according to a UEFA report quoted by the Associated Press.

In 2018, Alipay agreed to an eight-year partnership that included Euro 2020 and Euro 2024. The deal was worth € 200 million ($ 238.5 million), according to the Financial Times. For Euro 2020, Alipay’s deal includes the display of English and Chinese language versions of its subsidiaries.

UEFA said it could not disclose the cost of partnering with Chinese brands “due to confidentiality clauses”. When Ant was contacted by CNBC, Ant declined to confirm the scope of its eight-year partnership agreement.

Alipay, one of the two major mobile operators in China, has tried to expand globally by working with overseas merchants and Chinese tourists. The number of Chinese travelers has fallen since the pandemic forced countries to close their borders last year.

China’s fan base

Another Chinese company looking to benefit from the tournament is iQiyi, which has acquired the online live streaming rights for Euro 2020. Subscriber growth has stagnated at just over 100 million, while the company posted another $ 193.4 million loss in the first quarter.

The deal attracted “significant” visitor traffic as well as opportunities for business partnerships with Volvo, Heineken, Volkswagen and Meituan, said Lingxiao Yu, CEO of iQiyi Sports, in a Chinese statement translated by CNBC.

He declined to say if more people bought subscriptions as a result. The state broadcaster CCTV has the right to broadcast the games live on television.

While Euro 2020 has been one of the most popular topics on Weibo, China’s version of Twitter, in recent weeks, it is unclear how much of China’s football market can grow internationally without a team.

Over the past two decades, China has tried unsuccessfully to build its own teams by paying top dollars for foreign players and coaches, said Justo von Kantar. The only way for China to develop its own soccer stars will be to cultivate a local culture around the sport from the ground up, he said.

On TikTok, the contrast between the worldwide interest in football and that of China becomes clear.

The official account for Euro 2020 has 2.5 million followers, compared to just 291,000 followers on Douyin – the very popular Chinese version of the short video and streaming app, which is also part of ByteDance.

Risks of the China partnership

China remains a large and growing lucrative market for international sport. After decades of cultivation, the National Basketball Association’s local business reached $ 4 billion in 2018, Deputy Commissioner Mark Tatum told Forbes.

Working with China, however, has its own risks.

In 2019, an NBA-affiliated tweet backing protesters in Hong Kong caused mainland companies to suspend their partnerships, causing the association an estimated cost of up to $ 400 million.

The official video streaming platform Tencent resumed broadcasting of most of the games after a few days, while the state broadcaster CCTV stopped broadcasting the games for more than a year, according to state media.

Disclosure: CNBC parent Comcast / NBCUniversal owns the TV rights to English Premier League football matches.

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