Back on home ground in Shanghai, Chinese basketball legend Yao Ming offered a Schwarzenegger-like deadpan explanation for his much-publicized return. "I'm here on business," the Houston Rockets center told reporters before the first of two NBA exhibition matches in Beijing and Shanghai.
With his image plastered across advertisements for scores of consumer goods, Yao's is now arguably the most famous face in China – a country increasingly more about Yao than Mao, you might say.
But as China's sporting frenzy builds, fueled further by the run-up to the 2008 Olympics, Yao-mania is only a hint of the opportunities sport marketers believe China offers. From Formula One to ATP Tennis and NBA, China is establishing itself as a top-rank venue on the international sporting calendar.
The reason is simple, said Terry Rhoads, a former Nike executive and founder and CEO of Shanghai-headquartered Zou Sports Marketing. "If you're trying to capture mass consumers, you should fish where the fish are. And for young people, the big consumers everyone wants to capture, they are in sport."
Operating out of four Mainland cities, his company counts among its clients America's NFL, games maker EA Sports, the Chinese Basketball Association, Reebok, as well as NBA and Sacramento Kings star Liu Wei – and, not to forget, Everton soccer star Li Tie.
Of all the statistics this sports enthusiast keeps in his head, he has one that is uppermost: there are 390 million people under 18 living in China – an increasingly large chunk of them living in urban areas. "The point is that they spend money, and sport is a great platform to get into their lives," said Rhoads.
Take the NBA exhibition tour, an event that attracted the attention of some of the biggest name sponsors in the business: Kodak, Coca-Cola, McDonald's, Reebok, Disney and Budweiser, all of which target their product primarily at young, upwardly mobile, urban consumers.
Biggest growth market
With basketball introduced to China by American missionaries more than a century ago, the Shanghai and Beijing tour was the latest stage in the NBA's development drive in what is its biggest growth market.
"In growth terms all eyes are on China, both for us and our marketing partners," said Mark Fischer, the Beijing-based managing director of NBA China. "They share our vision that this is going to bring the NBA's presence, the sport of basketball, and their own brands in China to a new high." The NBA, he said, has taken "great pains to build up our presence here, our television coverage and our brand, and has done so in a high quality way that the fans have really latched onto."
Yao Ming, you might say, is the embodiment of that effort.
For Terry Rhoads, who signed Yao to his first contract with Nike, that is a reflection of how far the Chinese sports market has evolved in just a few years. "Today every big international sport that comes to China raises the bar on event excellence and sports marketing," he said, citing F1 and NBA events as prime examples.
In the 1990s, Rhoads said, a lot of blue chip companies came to China, tried to attach their brands to Chinese teams or leagues, but then left within a couple of years.
To Rhoads, it was a big disconnect between the needs and understandings of the sponsors and what he calls Chinese "properties" – the teams, sports leagues and athletes themselves. Rhoads formed Zou Marketing, he said, to act as a bridge.
Offering an example – one of the best to date, he said – Rhoads cited the case of German engineering giant Siemens, which decided several years ago to become involved with a specific sport in China. They chose soccer, sponsoring both the national squad and the Chinese Super League, gradually building an association between their brand and the favorite sport for hundreds of millions of Chinese.
"The problem is they are finding now that it can also be a double-edged sword," Rhoads said. "Look what's happening with the Chinese Super League – it's imploding, the teams are rebelling, seven are threatening to quit the league. It's been a complete public relations nightmare," he said. "Siemens must be wondering what has happened to their investment." It is a problem not confined to China, of course. "When you sponsor a movie or a TV show, you can control that message – in sports, you can't control the outcome," said Rhoads.
But that's also the beauty of sports marketing, he added. "People love sport because they know there is going to be drama, personalities, dreams and emotions. So it's a great platform for sponsors to connect with the market, especially here in China."
Rough time ahead
Rhoads predicts Chinese sports properties are in for a rough time over the next few years, unless they can respond to the challenge from the foreign entrants, like the NBA and F1, all clamoring for a bite of the China market.
"They are like sports cars – running very fast, efficient, sexy," Rhoads said. "But the Chinese sports properties are more like an old motorcycle – still running but not very attractive in comparison."
"What we've seen in the last 10 years is the radical shift to sport as business. And business is not kind to those who don't evolve – that's the challenge that the CFA (Chinese Football Association) faces with its pro soccer league."
Basketball has its own twists and turns. But NBA China's Fischer had no doubt about the impact of the recent tour and Yao Ming's much trumpeted return to home soil.
"People have told me that this was not only the greatest event that they had ever seen, but the greatest sporting event that China had ever seen," he said.
So did these greatest events, for all the tour hype, turn in a profit? "Suffice to say, it was an investment," Fischer answered. That sounds like a no. But for the NBA's China boss, the focus remains – for all NBA offices in Beijing, Shanghai and Hong Kong – raising the profile of the game in China, and growing all-important TV exposure.
In recent years the NBA's television presence has gone from one taped game a week – often more than a week old – to deals with at least a dozen broadcasters across the country, translating in some cities into as many as five games a week.
As exposure and viewership continue to grow, Fischer said, TV revenue will come to play as important a role in China as it does in more established markets.
"Further down the road, pay-per-view will also be important – probably starting with Hong Kong, which tends to influence some of the trends in the rest of China."
Fischer said sales of NBA merchandise have also seen promising growth, noting that Spalding, for example, sells more basketballs in China than anywhere else apart from North America.
And although the NBA faces the same problems as many merchandisers in China with piracy and copyright protection, it's an issue that Fischer views with quiet circumspection.
The NBA has an anti-piracy task force, he said, "But in China I don't think it's an issue that really cuts too much into our legitimate business. The hard-core fans buy the authentic kit; while the ones that cannot afford to – or don't really care that much – probably wouldn't buy the authentic stuff anyway.
"If they are knocking us off, at least it means we're hot."