US-based sports marketing guru Joe Favorito reached out and asked me to do a Q&A for his site on various aspects of the Chinese sports industry. Given that his weekly industry newsletter is distributed to well over 30,000 people, I was more than happy to oblige. Joe published the results in two parts – here and here – which are reprinted below.
Joe Favorito: How has the sports landscape in China changed the most over the past five years?
Mark Dreyer: There are two main drivers here: 1) Almost exactly three years ago, the Chinese government declared that sports would be an essential part of the economy, with the aim of building the country’s sports economy into the world’s largest – worth, they hope, $800 billion – by 2025. That has driven a huge amount of investment into the sports sector, as companies/individuals realize that investing in sports can be both politically and financially smart, and has seen increased targets for participation set by just about every sport from grassroots level up. Concurrently, there’s been a sea change in social acceptance of sports, especially among the growing middle class of some 300 million people, that sports can be beneficial for children instead of simply being a distraction from the all-important academic side. Those two factors have seen Chinese people getting involved in sports in record numbers across the board, making it a very exciting time to be involved in the industry.
JF: What is the biggest misconception the sports business world has about sport in China?
MD: Without a doubt, it has to be the numbers. Yes, China has close to 1.4 billion people and, yes, people are playing sports in record numbers, but that doesn’t mean 300 million people are about to take up your sport. The examples are everywhere: I could list about 20 European soccer clubs who claim they have close to 100 million fans in China, which means that the numbers are either very wrong or that the concept of what it is to be a “fan” is very, very different to the western notion. “If we can just get 1% of the population…” is a phrase that has inspired – and disappointed – countless executives across all sectors, not just sports, but the problem is, it’s not that easy to crack China. There are only certain sectors of the population to target – remember that close to half the country still live in rural areas, which are light years behind world-class cities like Beijing or Shanghai in terms of development. There are still a lot of people to go around, but every sport is targeting a similar demographic, so it’s still pretty competitive.