China's Sports Industry Growth
If you'd bought the broadcast rights for the 2015 China's football league, it would have cost you $13 million. If you'd done the same for the next five years, you'd be looking at $260 million a year. It follows similar deals such as Baidu's $269 million five-year agreement to stream Spain's La Liga football matches and the estimated $500 million Tencent paid for five-years of NBA games.
Spending big bucks on broadcast rights for sports is happening everywhere. As traditional TV advertising models wrangle with on-demand viewing, the nature of live sport means viewers can't fast-forward commercials. That's seen sport account for almost 40% of broadcast TV advertising in the U.S. alone.
The massive broadcasting deals are an indicator of the growing value of sport in China. The Government realises the health, productivity, diplomatic and general happiness benefits that come with sports, and have vowed to create a sports industry worth $800 billion by 2025. This will account for 1% of the GDP, up from 0.6% today.
Chinese parents are also increasingly encouraging their kids to participate in sports as they focus on giving them a more balanced upbringing, teamwork skills for only-children and preparation for the growing number studying overseas.
China's youth - independent of their parent's encouragement - are also looking at sport as a release from competitive academic environments and as a way to demonstrate their individuality.
Ping pong and badminton are losing favour to Western sports with basketball and football are leading the gains in exposure. Tennis has been helped by the now-retired Li Na's success, and golf is a sport Chinese shows a lot of promise on the world circuit, although it took a hit after being singled out in the anti-corruption component the latest 13th Five Year plan.
As Chinese seek more niche offerings with almost everything they do, NFL's long term investment in China is likely to drive a passionate following, helped by the much-anticipated China NFL movie. Although rugby is still tiny in China, work from committed expat coaches, its inclusion in the Rio Olympics and the Japan's hosting of the 2019 World Cup could help the sport, particularly for women.
The growth of sport in China is likely to bring prospects for many segments from tourism, to food & beverage, to fashion. China Skinny can help to realise those opportunities. Here are this week's news and highlights for China:
Chinese Consumers
Chinese citizens’ national identity, their perception of the world around them and where international brands are all relevant for foreign brands selling in China. Here are some things to look out for.
Chinese consumption is forecast to surge from $3.7 trillion in 2014 to $6.4 trillion in 2025, with 27% of the population accounting for 80% of the growth in spending. More than half of new spenders will come from the top-5 city segmentations.
Wal-Mart's Asia CEO: China Will Drive Retail Growth
"We think online-to-offline is critical," says Asia CEO and president Scott Price, as "customers look for convenience, and convenience is not just one mode."
Sports
Li Ruigang's China Media Capital To Pay $1.3 Billion For Soccer League Broadcast Rights
State-backed investment firm China Media Capital has signed a five year all-media exclusive global broadcast rights of Chinese Super League for $1.3 billion. The league sold its broadcast rights for $13 million for 2015 and $8 million in 2014.
Education
Number of Mainland College Students in US Exceeds 300,000 for First Time
Chinese mainland students in the U.S. grew 10.8% in the past year, with the 304,040 students accounting for 31.2% of all international students in the country.
Internet, Mobiles, & Social Media
Why Have QR Codes Taken Off in China?
After largely failing in the West, the mass adoption of WeChat and its embedded QR reader means any brand worth its salt uses QR codes in China.
Are Chinese Tech Companies Innovative?
In 2014, China spent $200 billion on research and development and more than 1.2 million engineers graduated - more than any other country, meaning the country has "the potential to become a global innovation leader."
Online vs. Offline: Where Do Chinese Consumers Really Win?
The average online prices for consumer goods in China are 8% lower than their offline prices when there are no sales promotions.
Food & Beverage
Chinese Sea Salt May Contain Small Plastic Particles, Study Says
Sea salt samples from 15 supermarket brands in China have high levels of plastic particles, with more than 550 plastic particles for every kilogram according to an East China Normal University study.
China Wine Imports Rebound in 2015
Bottled wine imports to China rose by 38.7% in volume and 34.7% in value to $1.4 billion for the first nine months of 2015, driven by French, Australian and Spanish wine according to Chinese customs data. Australian wines were the standout performer, growing 59% in volume and 16% in price per bottle, with total value now more than half of French wine.
Will Belvita Win at Breakfast in China?
Mondelez has taken its breakfast biscuit concept to China in a bid to capture growing demand for "modern eating habits" in the mornings. Biscuits for snacking are already one of the most popular foreign categories in Chinese supermarkets and online stores, with
Britain's digestives selling increasingly well in China
Xi Pub Visit Prompts Newfound Interest in British IPA
Photos of China’s president enjoying a pint of British beer in an Oxfordshire pub have sparked a “frenzy” for British Ale, with one publican reporting patrons just asking for "what Xi Dada (President Xi) drank."
Luxury
Vuitton Looks to Close Chinese Shops Amid Luxury Slowdown
LV is reviewing eight stores in second-tier cities. While some may be moved or refurbished, others will close to "avoid being overexposed" as market dynamics change and more Chinese shop abroad.
Property
Houses as far afield as NYC worth as much as $14 million are being snapped up by Mainlanders who have only ever seen the house on WeChat.
Cars
Lower-End Demand to Further Underpin China SUV Sales
China's SUV sales volume grew by 48.0% year-on-year in the first ten months of 2015, while the overall passenger vehicles growth was 3.8%, down from 9.9% in 2014. SUVs accounted for around 21% of China passenger vehicle sales volume in 2014 and 29% in the first ten months of 2015.
That's the Skinny for the week! See previous newsletters here. Contact China Skinny for marketing, research and digital advice and implementation.
