|
5/31/2018
Jian Yu (Paul)
Degree in Sports Management & Physical Education
events@enlio.com
Marketing Associate/ Event Manager of Enlio Sports Goods CO,. Ltd
Ph & WhatsApp :+86 18033797569
Skype: paulxpro@hotmail.com
Should you align with Chinese Sports Industry or Do it now !
In August 2007, Subprime Crisis broke out from America. The outburst of economic failure made us to rethink where we should put our money at and where the safest place to invest in is. The Subprime affected Europe and caused the some countries to announce bankrupt. And then Asian countries had been affected. The economic power was then spread out from USA to other places of the world. Although the incident had huge influence to the world economic, but China, as the largest and fast growing economic body balanced the impact of the Subprime Crisis. How? The simple way to answer this question is: China is the biggest consumer market in the world.
Before you think of the question in the title, let’s look at some of the examples of successful investments in China.
KFC was the first quick-service restaurant chain to enter China in 1987. Today, KFC is the number one foreign brand in China with more than 4,600 restaurants in over 950 cities.
Volkswagen Group China is the largest, earliest and most successful international partner in China’s Automotive Industry. It started the connection with China as early as in 1987. In 2010, VW sold 1.48m cars in China, as increase of 39% and twice as many as vehicles as sold in its domestic market. China has rapidly emerged as the centre of gravity for the global car industry, which is slowly recovering from as steep economic downturn in the past two years since the Subprime Crisis.
According to Apple’s 2014 Q2 2014 earnings statement, net sales in China reached a record $9.6 billion last quarter. That is a year-over-year increase of 13 percent in China, compared to just a 5 percent increase for revenues worldwide.
Tesla the using the Apple’ model entered China and looking forward a bright future in China. According to the Tesla investment report, there will be 5000 Charging Point in Shanghai by the end of the year 2015. And the Tesla Supercharger station will be expended to 21 cities in China.
Will the Tesla success in China? The bright future is already there for Tesla China. As I mentioned above, there are some extremely successful examples to invest China in different area and in different industries. What we are a hundred percent sure is China is the most powerful consumer market in the world. As an investor or a student of international economic, even a small business owner, you may think what else could I do in China? In another word, what is the other area or industry in China should the investment goes in? As a sports man and sports management major student from China and studied at America, I couldn’t help to think about the bright future of sport industry of China. Now let’s try to find the answer to the question from the title. Should you invest in sport in China?
Matt Beyer is an associate director at North Head, a Beijing-based strategic communications and public affairs consultancy. He pointed out the direction of Change and several cooperate opportunities for business in the sport area in China. Yao Ming’s case is one of the successful one in the area of sport between China and the NBA in United State. Yao Ming is a famous basketball player in China before he entered the NBA, now he is well known supper star in USA and China. He catches the eye ball of American investors. What Yao proofed and told to the investors is the great potential of Chinese sport market. Yao brings in a huge amount of Chinese basketball fans (huge population in China) into NBA which benefits NBA in broadcast rights greatly. From the general view of international business, investors in China and USA of different areas willing to pay for advertisements during the NBA games because of this Chinese player. Sport now acts as very important platform for all businesses between the two countries. To be an investor, of course you would like to create more opportunities like Yao’s case. Later on, players trade between China and America generate a lot amount money in the industry of sport. Yet, on the side of China, sport is still not developing in a high speed.
International business relies on the country’s policy a lot. So as to Chinese policy towards to sports. Investors must investigate policies Chinese government offers. Unfortunately, policies for sport are still not open greatly as other business does in China. People may think investment in the sport area in China is a bad idea since it relies on policy so much. Li. Ming, the scholar of sports management who introduced the Chinese sports system in the “Book International Sport Management” saying that China has a centralized sport system and the ownership is not open to the private sector. Later on even the Chinese government realized the great opportunity and opened more to develop sport market like Yao’s case, the window for foreign investors is still not open.
But everything has two sides, one side is Chinese sport industry is not developed, while the other side is Chinese sport industry has huge potential to growth.
In “Sports industry in China Part I: Tapping the Goldmine” columnist Zhenyu, Li pointed out that sport industry in China donate very small amount of percentage of the GDP, and it is even much less than other developing counties. Yet there are 90 percent of the sport market not developed in China. Along with his research he stated that after the 2008 Olympic Game hold in China, governors realized that China is really lack of the professional sport agents to cooperate with the international sport communities. At the same time, during the 2008 Olympic Game , China harvests the first amount of metals indicate that China has a great professional strength and economic strength for sport industry. Zhenyu Li said”Chinese sport industry is a goldmine! ”
Reasons to invest and where to invest in China
Regarding to the great consuming ability of China, let’s think about what areas investors could be benefited. Recreations chain companies may consider introducing better recreational ideas and equipments in China. They could either be a supplier of advanced equipments or in form of human resources. Like what KFC did in China. Potential market is so huge and yet developed. The opportunity to cooperate with Chinese college sport is great as well. According to Zhengsong Zhou, the scholar in Beijing Sport University, he said:” College sport in China is really low leveled, colleges are lack of successful programs for college athletes, and training level is really low as well. “ He realized that the advantage of American college has, and he argued that Chinese university should learn from American college. Then there will be several areas that related to the college sports could be opportunities. Coach training, athletes training, sports program introducing and other college sports related areas are needed by Chinese colleges.
Wang Rachel, the famous columnist from Tea Leaf Nation, analyzed the Chinese Soccer industry. In his report he stated” Chinese national soccer team lost to Thailand by 1-5 on June 15th 2013. The 95th- ranked Chinese team lost to 142nd –ranked Thailand team.” When you see this record, you may think this is unbelievable because of the ranked level is so far away between the two countries. But this is the hard fact that how bad the Chinese team is now. Recently, Xi Jinping, the president of People’s Republic of China, as a soccer fan he promotes soccer greatly. He visited soccer school in Germany during the State visit to European which indicates his concern of Chinese soccer. Xi announced that “Soccer should hold from Child.” And recently Chinese carried out the program of soccer for elementary school, middle school and high school. All the policies are only for one goal, which is develop the Chinese soccer and improve the soccer level among the world. Professional soccer games generate large amount of fans in China, the population base is great and the opportunities for investors are great as well. Areas such as advertising, player trade with South American and Europe, high leveled coaches’ import are great areas to cooperate with China now.
From Sina Sport News , it is said “Many big stars and clubs have already realized their influence in China can bring them a considerable income. Manchester United is the leader in making their presence knows who has over 20 million supporters in China.” Opportunities include soccer stars, professional clubs and sports good for Chinese soccer industry are great. Believe this is really happening, in 2011 the Super Coppa Italiana came, over 70 million Chinese football fans watched this game on TV, this type of ratings are unheard of considering that is more than the total population of Italy. Should investors invest sport in China?
Hesitating?
Still Chinese professional sport is highly regulated. Ownership is not clear, not only for foreign investors but Chinese investors as well. In this centralized sport system, investors could only have part of the team, never for all. What more confusing is even the investor has 51% of the team they still do not have the power to control the team. The mercerization progress is relatively low speed. Investors are not confident or scared of investing Chinese sport.
As an exchange scholar from China, I experienced all the changes Chinese sport made during the latest 10 years. With the degree of physical education and sport management, I predict the future of Chinese sport industry is bright and I have to argue that investors should come into Chinese sport industry.
From the aspect of education, Chinese government is promoting sport education in different levels of schools rapidly in the past 10 years. Students who have outstanding sport abilities will be given bonus points to higher level of education- the entrance exams such as middle school entrance, high school entrance and college entrance exams. These exams are extremely important to Chinese students because the large population made the better school limited. Especially the college entrance exam is so important that will change one person’s life in China. And the grading system consists of sport as one element .You could tell how important the role sport is in China now.
From the aspect of life, public sport facility have been built everywhere in the city. Citizens are able to use better facility than ever before. Nationwide Fitness Campaign events have been holding every year throughout the country. Sports goods industry has been developed in a high speed. According to Li-ning annual record, a famous national sport good company in China, founded in 1990, now has 8255 stores all over the country. Li-ning generated sales of 8.929 billion Yuan in 2011.
From the aspect of globalization. China entered WTO in 2001, there are many industries have been affected by foreign companies and forced to be changed to cooperate well with the world economic. The overall Chinese market is opened to the world and there must be challenges and competitions to Chinese companies. China as one of the most important part of the world economic must face the challenge of every industry. Sport industry is still not well developed, but it will eventually adjust itself and open to the world’s sport industry.
Traveling all the way from China to America, I only have one goal: To learn the most advanced theories of sports industry from here. And apply to Chinese sport. As I mentioned all the area and opportunities in sport industry in China, sport will be a hot career in China. All the disadvantages and weakness are opportunities for investors and even a student who interested in sport industry to be considered with. Should you invest in Chinese sport? Does China have the desire of growth in sport industry? The answer is positive.
|
