The main event

In 12 months time, the wait will finally be over. August 8, 2008 will see the lights go up in the new National Stadium on a 16-day sporting spectacle that has been seven years in the making. For China, hosting the Olympics offers a potentially much longer-lasting legacy.

Companies both foreign and domestic are looking to exploit the phenomenal marketing opportunities the event offers. Whether an official Olympic sponsor or an outsider hoping to muscle in on the action, the corporate stakes are very high.

“The Beijing Olympics are probably the most important sporting event of our lifetime for global and local companies,” said Greg Paull, principal at marketing consultancy R3, which is conducting tracking research on companies that are looking to leverage the Olympics.

“The CEOs of global companies are going to be spending 10-20% of their time in China over the next year.”

Some sectors are obvious winners. The boom in tourism will be good news for hotels and travel agents; construction firms are already benefiting from infrastructure expansion; Chinese media can expect bumper advertising revenues; and sportswear companies – global players like Nike and Adidas or ambitious locals such as Li Ning – can do well largely because of the nature of the event.

But the participants are not limited to the realms of the predictable: In theory, any company willing to shell out enough money for official sponsorship will also profit.

There are three sponsorship levels and, while official figures aren’t disclosed, CLSA estimates the prices range from US$20 million to more than US$60 million. PC maker Lenovo is China’s only top-tier “world level partner” but eight of the 11 tier-two sponsors are Chinese as well as six of the 10 in tier three.

In addition to this select bunch, there  are a myriad of other firms that plan on linking their advertising to the Olympics on an unofficial basis.

For larger Chinese companies looking to use the Olympics as a stepping-stone from a national to global level brand, the targets are pretty clear. All of the companies in the global Top 100 list drawn up by Interbrand, a branding consultancy, bring in at least 50% of their revenues from overseas markets.

“China Mobile [which is comfortably top of the China internal rankings] only generates a fraction of its revenue from overseas,” said Jonathan Chajet, Asia Pacific strategy director at Interbrand.

While the Olympics will undoubtedly help certain companies address this balance, Chajet believes the true winner could be the China brand itself.

“At present, ‘Made in China’ means ‘cheap and low quality.’ The Olympics gives these brands an opportunity to change this perception and be perceived as world class on the global stage. The country brand is inextricably intertwined with companies’ global brands.”