Chinese companies spend big on ads during World Cup

Yingli's advertisement is seen in the Maracana stadium in Rio de Janeiro, Brazil, before the opening of the World Cup. Photo: Courtesy of Yingli

China's soccer team did not make it to this year's World Cup in Brazil, but audiences might have noticed advertising boards displaying four Chinese characters - China Yingli - during the opening match between Brazil and Croatia at the Arena Corinthians in Sao Paulo on Thursday.

It is the second time the Hebei-based solar panel maker is sponsoring the world's most popular soccer event after it became the first renewable energy firm - and the first Chinese company - to sponsor the event in South Africa four years ago.

Sole Chinese sponsor

Yingli Green Energy Holding Co is still the only Chinese company among six FIFA Partners, eight FIFA World Cup Sponsors and eight National Supporters for the World Cup in Brazil. The firm announced this sponsorship in June 2011.

As a FIFA World Cup Sponsor, Yingli's advertising will be shown during all 64 matches, for at least eight minutes per match, in all 12 of Brazil's World Cup stadiums. The sponsor also enjoys the right to place its company logo next to the FIFA World Cup Official Emblem to advertise its products.

"The World Cup serves as a perfect marketing platform as we aim to sell our products globally," Liu Chongyuan, a public relations officer with Yingli, told the Global Times Tuesday.

"Our first sponsorship mainly aimed to increase our brand awareness, and this time we want to let more people know about the quality of our products and services as well as to raise their awareness for solar technology," he said.

Last time's sponsorship brought Yingli an estimated profit of $50 million, according to Liu. Thanks to the World Cup effect, Yingli's shipments of photovoltaic (PV) modules continued to rise in the past few years, and topped the world with 2.2 gigawatts (GW) in 2012 and 3.2 GW in 2013.

Sponsoring the World Cup in Brazil is also in accordance with the development trend of the global solar industry, which is shifting from traditional US and European markets to emerging markets including Brazil, Liu noted.

On June 3, the US decided in a preliminary ruling to impose new countervailing duties on solar panels from China, a new blow to Chinese solar panel makers including Yingli after China settled its solar trade disputes with the EU in August 2013.

Liu declined to disclose the sponsorship fee, citing its agreement with FIFA, but said the average marketing cost per watt is low given its large shipments of PV modules.

In Yingli's financial report for 2010, the company noted that its annual marketing expense rose to 206.5 million yuan ($33 million) due to its expanded scale of operations and the 2010 FIFA World Cup sponsorship.

The huge sponsorship expense has raised concerns that it will add to the financial burden for Yingli, which posted consecutive losses from 2011 to 2013.

"We've already paid most of the sponsorship fee in the past few years, so it will not increase many marketing expenses for this year." Liu said.

"Sponsorship spending will also help Yingli boost its yearly shipment to 4.0-4.2 GW."

Beer competition

Harbin Beer is another sponsor of the FIFA World Cup 2014, but as a brand under the world's largest brewer Anheuser-Busch InBev, which acquired the Chinese beer firm in 2004.

"The advertisements for Harbin Beer will be displayed during three group matches in June," Anheuser-Busch InBev said in a reply sent to the Global Times Wednesday.

Anheuser-Busch InBev is a long-term sponsor of the World Cup games, but the 2010 World Cup in South Africa marked Harbin Beer's first alliance with the tournament.

"Harbin Beer has grown into a national brand from a regional one through sponsoring the South Africa World Cup," the Belgium-headquartered brewer said. "We hope to raise Harbin Beer's brand awareness and reputation especially among young people and also boost sales through the sponsorship."

Harbin Beer ranked No.4 in terms of sales in China in 2013, behind Snow Beer, Tsingtao Beer and Yanjing Beer, according to data complied by China Alcoholic Drinks Association.

"To further lessen its gap with leading beer brands, Harbin Beer needs to take advantage of Anheuser-Busch InBev's platform to expand sales channels," Fang Gang, a Shandong-based marketing expert on beer, told the Global Times Wednesday. "Being a sponsor of the World Cup is not enough."

Other beer makers also do not want to miss the World Cup opportunity to promote their products. Tsingtao Beer has released new packages of beer with a World Cup-related theme.

A total of 1.6 million cans of beer were sold on tmall.com, Alibaba Group's online marketplace, during a sales promotion on June 4, generating revenues totaling 6.25 million yuan, the e-commerce firm said Monday.

Tsingtao Beer ranked No.1 in terms of sales among domestic beer brands, and Germany's Valentins Weiss Beer was the most popular foreign beer brand with sales revenue of 2.46 million yuan, according to tmall.com.

Fang noted that the World Cup will create a drinking bonanza among soccer fans or in the host country, but is not likely to significantly drive up yearly beer sales in spectator countries like China, where the beer industry has also passed the fast-growth period.

Previous data also showed that beer sales in China had not significantly increased during previous World Cups in 2002, 2006 and 2010, analysts from Shenyin & Wanguo Securities said in a research note published in mid-May.

On the screen

For those companies that could not be partners or sponsors of the World Cup, advertising with the national broadcaster is their top choice.

Tmall.com will spend 141.6 million yuan to sponsor a China Central Television (CCTV) program featuring scorer rankings, and sportswear giant Nike will pay 46 million yuan for naming rights of another World Cup-related program, according to CCTV's annual ad auction held on November 18, 2013.

CCTV 5, the State broadcaster's sports channel, could gain advertising revenue of 1.5 billion yuan during this summer's World Cup, up from 1 billion yuan four years ago, Hunan Province-based Football Weekly reported earlier this month, citing an unnamed insider.

But the traditional broadcasting platform has been increasingly challenged by new media outlets. Internet consultancy iResearch estimated that 530 million Chinese Internet users will follow the soccer event through digital media.

The advertising revenue of websites will reach a total of 700 million yuan during the tournament, with Tencent grabbing more than one-third of this amount and Sina earning around 100 million yuan, the Football Weekly report said.

Video website letv.com, which has recruited well-known soccer commentators Huang Jianxiang and Dong Lu to anchor World Cup programs, also announced on June 6 that its advertising revenue has exceeded 100 million yuan for the soccer carnival.