With over 300 million yuan bet on the European Cup, can Chinese brands rest easy?

Why did the European Cup attract so many Chinese brands to offer sponsorship? This article will help you find out the reasons. This article is also recommended for companies or individual business owners.

Chinese brands booked out the entire stadium, and in the European Cup celebration, Chinese brands once again created a "myth" in sports marketing.

But behind the heated European Cup, wave after wave of international competitions, and huge investments in sports marketing, is it the best way for Chinese brands to “win the global battle”?

1. This is a "relief" European Cup

This European Cup is undoubtedly a Chinese brand, and it is an international sports event that has made hundreds of millions of Chinese people feel relieved. Among them, what makes us feel deeply proud is that BYD, a Chinese independent automobile brand, has successfully replaced Volkswagen, the "home" sponsor, and become the first Chinese automobile company to become a top sponsor in the history of the European Cup.

This is not only the "halo" of BYD, but also the entire Chinese automobile industry. Under the guidance of the country's new energy policies and the promotion of collective overseas expansion and cross-border development, it demonstrates the status and "momentum" of the Chinese automobile industry in the new energy era and in the "second half" of the automobile industry, especially the impact and pressure on a number of international century-old automobile giants such as BBA.

Of course, it is undeniable that BYD replaced Volkswagen as the top sponsor of the European Cup. It is indeed UEFA's "accepting all comers" and "reciprocating" the companies that sincerely sponsor with "real money", which in turn gives BYD enough popularity and brand voice inside and outside the European Cup.

On the other hand, the reason why BYD was able to replace Volkswagen was also a "marriage" facilitated by the highly compatible opportunity of the local advocacy of the concept of green development.

For example, according to China Auto News, the EU "released a timetable for autonomous driving six years ago, striving to enter a fully autonomous driving society by 2030". And to fully enter the era of autonomous driving in 2023, it is obvious that by then, new energy vehicles are expected to completely replace fuel vehicles, and shine in an era that emphasizes low carbon and environmental protection. This is another reason why BYD won the European Cup "halo" this time.

Image source: China Auto News

Overall, this European Cup does belong to China's independent brands, whether it is BYD, Hisense Group, vivo, Alibaba, etc. Although each Chinese brand did spend at least 300 million yuan in "real money", it made this European Cup an event for Chinese national brands to "raise their heads" internationally.

In fact, from the moment the list of top sponsors of the European Cup was released, the news that more than one-third of Chinese brands had been "contracted" as top sponsors of the European Cup continued throughout the entire season.

The high "exposure rate", huge voice and even "immediate" sales increase obtained in exchange for "real money" and the fierce competition in the overseas market that has already "opened up" seem to be really getting what they want for these Chinese brands that have invested huge amounts of money, just like "planting beans and reaping beans".

However, the European Cup will come to an end on July 14th local time, and the carnival of global audiences will naturally cool down.

So? After the public opinion and sales boosting effects brought by the European Cup to the sponsor brands have dissipated, how can Chinese brands ensure sustainable development and continuous high-frequency resonance of voice and sales in the process of going overseas? How can they gain the core competitiveness and hard-core combat effectiveness of cross-border sailing in overseas markets such as Europe, and then build their own "going overseas" moat?

Perhaps, whether it is the European Cup or a series of subsequent large-scale global sports marketing events, it is understandable for large Chinese companies that are "not short of money" to blindly bet huge sums on sports marketing. Who would not want to rely on their own strong financial strength to "spend money" to win the rights of top sponsors and then gain a rapid amplification effect of volume and sales?

However, if we are too obsessed with sports marketing, which is a simple "path dependence" of "spending money" to exchange for traffic, voice, and sales, it may be difficult for Chinese brands to gain sustained differentiated competitiveness in the increasingly fierce overseas market, which has begun to "roll" like the domestic market. In other words, to form and build our own overseas barriers and core competitiveness, in addition to sports marketing, we need to work hard on specific business operations, cater to the various differences in overseas markets, and then "follow the local customs" to achieve the expectations of "seeking new growth" and "finding the second curve" that were set when going overseas.

2. How many European Cups can be repeated?

Whether it is the European Cup, the World Cup, the Super Bowl or even the Olympics and other international sporting events, the global user groups radiated by them, with huge investments, the high appearance rate, high volume, high traffic and even high sales "exchanged" during the events in the name of top sponsors may have a temporary "eye-catching" effect on the target overseas users of Chinese brands, but to truly capture their minds and win a new "seat" in their existing mental space, perhaps more European Cups, continued increases in investment, or even raising sports marketing to the level of corporate strategy, may not necessarily achieve the desired result.

On the one hand, with all industries in the domestic market involuted, almost all Chinese brands are seeking to expand overseas and cross-border to gain new sales, trying to open up a good growth momentum in the "second half" in overseas markets. This inevitably leads to Chinese companies showing signs of opening up in overseas markets after involuting in the Chinese market.

For example, cross-border e-commerce represented by the Four Little Dragons has seen increasingly fierce competition in recent years, even "unconventional" and stalemate competition.

On the other hand, the overseas market is different from the domestic market in many ways, whether in terms of compliant operations, intellectual property protection, and consumption habits and preferences of users in different overseas regions.

Therefore, it is understandable that they want to sponsor international sports events such as the European Cup with hundreds of millions of yuan and pursue the "leverage" effect brought by sports marketing. However, if we look at the financial reports or relevant data from authoritative market research institutions, some Chinese brands that shined in the European Cup, behind the "halo" and "spotlight", actually have hidden "concealed worries" about their development.

Take Hisense Group as an example. It became the focus of public opinion in this year's "big event" of Chinese brands "contracting" the European Cup.

The main reason is that Hisense, which has sponsored the European Cup since 2016, has provided real data to support its sales growth and brand awareness during each European Cup sponsorship. It has been regarded as a typical successful sports marketing sponsorship case and reported by major domestic media, allowing Hisense Group to gain more "halo" and voice.

I still remember that during the 2018 World Cup in Russia, Hisense’s advertisement was “Hisense is the best in Chinese TV”; four years later during the Qatar World Cup, Hisense shouted “No. 2 in the world, No. 1 in China”. Hisense really showed its real strength, and during international sports events, its brand awareness and sales both showed significant growth.

Since Zhou Houjian retired, the company's leader has changed twice. The new leader has gone all in on internationalization and high-end strategies. With the trend of going overseas and the intensification of domestic market competition, overseas markets have become the best solution.

As a technology company, research and development is of utmost importance. In this European Cup sponsorship, Hisense has also become the official display partner of the 2024 European Cup VAR (Video Assistant Referee), and will provide display technology support for the Leipzig VAR referee headquarters during the European Cup.

After sorting out more data from market research institutions, in terms of competition, the global ranking of the three major domestic home appliance giants in 2023 will be: Midea Group first in overseas revenue, Haier Smart Home second, and Hisense Home Appliances third.

Hisense is just one example. Taking cross-border e-commerce as another example, AliExpress, a subsidiary of Alibaba, became the first e-commerce brand sponsor in the history of the European Cup with over 300 million yuan in real money, setting a record and a precedent.

The development of AliExpress in recent years, especially after Alibaba's split strategy and Jiang Fan taking charge of international business, has indeed been accelerating.

However, each of the four little dragons has its own unique skills and trump cards. Take TikTok as an example. Although it did not appear in the list of top sponsors of the European Cup this year, it did not stay away from the European Cup, but chose to sponsor specific teams at a lower "cost".

Temu's "Super Bowl" made it a hit, which won it a huge release of voice and established its popularity in overseas target markets. However, it did not continue to sponsor large-scale sporting events like Hisense did, but instead worked hard on its core business, so that it was able to achieve "efficiency improvement" under the premise of "cost reduction".

AliExpress, which was officially launched in April 2010, is China's largest and earliest cross-border retail e-commerce platform. Compared with Temu, TikTok shop and even SHEIN, which have captured the minds of overseas target users in a short period of time, AliExpress needs to rely on this European Cup to strengthen its brand awareness and potential for increasing market share.

In fact, this is also the result of Temu, TikTok shop, etc. using their own differentiated gameplay, different strategies, combined with their own platform advantages, occupying the user's mind and market share, and continuously optimizing the supply chain, logistics warehousing and distribution to improve user experience, thereby building core competitiveness and forming high-frequency user repurchase and brand loyalty.

In fact, while AliExpress was conducting a series of short-term promotions around the European Cup, similar to moving the Double 11 and 618 promotions to overseas markets such as Europe, the relevant team of Amazon quietly came to the Chinese market.

Putting aside the short-lived carnival of the European Cup, they held a closed-door meeting with their core sellers in the Chinese market to discuss the strategy of adding a second channel, a completely different "low-price store", in addition to the current main battlefield.

Amazon has another strategy, which is to open a relatively high-quality, carefully selected, and preferential high-quality area after the products run smoothly.

3. Sports marketing is not a panacea for going overseas to increase growth. Path dependence is not as good as "getting ahead in a fancy way"

For Alibaba, Hisense, vivo, etc., spending hundreds of millions is not a difficult task, but how to continue to occupy the market and face fierce competitors, and be able to constantly respond to their moves strategically and tactically in real time to increase competitiveness, is the real challenge and the core path to seize opportunities and win growth.

Take vivo as an example. Vivo's sports marketing is not a one- or two-day thing, but its development in the European market has not been satisfactory. It has not only failed to meet its own expectations, but also made the industry feel sorry that vivo "spent money" on the European Cup but "spent" nothing.

According to the latest data, vivo, which signed a cooperation agreement with UEFA and invested heavily in major international sporting events such as the European Cup, has fallen out of the top 5 in terms of market share in Europe this year.

On the contrary, Honor, a "latecomer" that did not spend money on sports marketing such as the European Cup, adapted to local customs, quickly combined with the actual sales situation of the local mobile phone market, and "shot from both sides" with dealers and operators. In a short period of time, it replaced vivo and entered the top 5 in the European market. This is worthy of reflection by vivo and even more Chinese brands that are keen on spending huge sums of money on sports marketing.

Because, in order to accelerate the development of overseas market potential, Chinese brands face opportunities and challenges that cannot be solved by simple sports marketing sponsorship.

As "going overseas" has become a new proposition of the era for Chinese companies, to "win" the second half, they still need to have a more unique, differentiated, loud sales volume, and mental repurchase-integrated, sustainable "killer"-level hard-core "combination gameplay".

In addition, judging from the specific publicity of this European Cup sponsorship, our company may still lack some "acclimatization" issues in communicating with target overseas consumers at the mental level when going overseas or cross-border, or it may be necessary to truly bridge the "gap" in cross-cultural communication.

According to the "Independent Review of the Sports Industry", citing Professor Wang Liji, director of the China Outbound Tourism Research Institute, in his overseas column, many of the messages conveyed by these Chinese brands may be suitable for Chinese people, but not for Europeans.

For example, BYD wrote "No 1 Hersteller von NEV" in German on its billboard. Professor Wang said bluntly, "Germans don't know that NEV is the abbreviation of new energy electric vehicle. Its German abbreviation should be "Elektrofahrzeugen" or "EV". In addition, for Europeans, the first means the best, not the biggest."

According to Bloomberg, during the European Cup, Alibaba needs to achieve a 70% increase in effective users on AliExpress, only in this way can its huge marketing expenditure not be wasted. In this regard, Professor Wang Liji admitted, "Considering its clumsy marketing, this seems unlikely."

Professor Wang Liji, an expert on China and cross-cultural studies, lamented that most Chinese brands had wasted a lot of money on sports marketing sponsorships. “The huge amount of money they spent on the European Cup and its marketing was a great opportunity for Chinese brands to enter the minds and hearts of European customers. Alas, if they had taken out even 1% of the money they paid to UEFA to hire some cross-cultural experts, it would not have caused the current chaos.”

In general, we should give a thumbs up to Chinese brands for "contracting" the European Cup. However, after they have won glory, popularity and temporary sales with "real money", it may be necessary to question how they will face the challenges of sustained and healthy development in overseas markets in the future, and how they will gain hard-core combat effectiveness and truly find new growth and the second curve in the context of cross-border competition that has already begun overseas.

In a nutshell, when Chinese brands go global, they must not be trapped in the path dependence of sports marketing.

Author: Feixue; Editor: Weber

Source public account: Value Planet Planet (ID: 1092401)