China Sports Business Weekly | 4th October
Here are the top China sports business news stories you need to know from this week. In this edition, my From the Top interview is with Alex Duncan, Co-Founder of social media management platform KAWO, where we discuss KAWO’s latest WeChat & Weibo trends report, the key insights, and what to do with content.
Suning Sports Cuts Staff & Restarts Alibaba Talks The owner of Chinese digital streaming platform PP Sports is set to layoff almost 30 percent of its staff to cut costs while also reigniting joint-venture talks with Alibaba. Suning Sports recently announced the company’s finances were under pressure after heavy spending on sports media rights for its streaming service PP Sports. The news of the layoffs and Alibaba talks was reported by Lanxiong Sports, which estimates that PP Sports has rights fee commitments of more than $480m per year. Read more on SportBusiness (English) and Lanxiong Sports (Chinese)
Mailman Take: If these reports are true then it’s not looking great for Suning Sports and I’d predict $480m a year is a low assumption. Factor in $230m a year for EPL rights alone, and then add on Bundesliga, CSL, AFC, and so on - it’s not cheap. Staff cuts and selling/sharing media rights is akin to LeSports a few years ago. Suning needs to realign its strategy, focus on its core product, and have patience.
OPPO Signs 5-year Esports Deal with League of Legends The popular online video game published by Riot Games has named OPPO as its exclusive global smartphone partner until 2024. OPPO will have year-round activations at the sport’s three annual global tournaments: the Mid-Season Invitational, the All-Star Event, and the World Championship. Read more on esports.net (English) and Baidu (Chinese)
Mailman Take: OPPO has most notably used the sports of cricket and tennis in recent years as platforms to grow brand visibility outside of China. However, it recently ended its sponsorship of the Indian cricket team and has now moved into the esports sector. With this move, OPPO is clearly looking to target a younger demographic through the popular online game which continues to increase in value.
CTA Receives Hall of Fame Award
The Chinese Tennis Association (CTA) has received the 2019 Global Organisation of Distinction Award from the International Tennis Hall of Fame. The award aims to honour an organisation, federation or facility that has demonstrated a successful track record of distinguished service and contributions toward the growth of tennis. China’s achievements were recognised at both elite and grassroots levels, including having over an estimated 19 million recreational players. Read more on ITF (English) and CTA (Chinese)
NBA 2K League Announces Shanghai Team The NBA 2K League will have a Shanghai team starting from the 2020 season, making it the first squad from outside of North America to join the National Basketball Association's esports arm. Launched by esports organisation Gen.G, the team will be the NBA 2K League's 23rd team and the first not affiliated with an NBA franchise. Read more on ESPN (English) and Lanxiong Sports (Chinese)
FIBA World Cup Releases Impressive TV Ratings The International Basketball Federation (FIBA) revealed the recent World Cup in China delivered a total cumulative average television audience increase of over 80 percent compared to the 2014 event in Spain. China’s state broadcaster CCTV posted its two highest live ratings of the year during the tournament, with China’s matches against Poland and Korea attracting 68 million and 60 million viewers, respectively. Read more on SportsBusiness (English) and HUPU (Chinese)
In Other News
Shanghai Masters Set for Big Names Novak Djokovic, Rafael Nadal, Roger Federer, and Andy Murray are set to reunite next week at the 2019 Rolex Shanghai Masters. Djokovic, Federer, and Murray have combined to win all but the first edition of this ATP Masters 1000 tournament, the final stop of the three-week Asian swing. Nadal, a two-time finalist, will be going for a record-extending 36th Masters 1000 title as he aims to increase his lead over Djokovic in the battle for year-end No. 1. Read more on ATP (English) and Netease (Chinese)
From the Top
This week I spoke to Alex Duncan, Co-Founder of KAWO.
1. Can you give a brief summary of KAWO's journey in China and what it offers it for its clients? 6 years ago we realised there was an opportunity to help global brands to connect better with their fans in China via social media. While in the West platforms like Hootsuite were already well established, in China there was nothing, everyone was still wasting hours stuck in Excel spreadsheets, emails and creating PPTs. The unique internet ecosystem here also made it a challenging and confusing place for international companies. KAWO provides a SaaS software platform that connects marketing teams around the globe, helping cross language and cultural barriers. Teams can plan content and collaborate better and have powerful reporting that enables deep insights into their Chinese fanbase. We have a specialisation in sports and are lucky to work with some of the biggest names in the industry.
2. Your recent report looks at the trends and insights from WeChat and Weibo, what are the biggest learnings from this? Firstly, the decline in engagement and follower growth seems to have stabilised. We’re now in the new normal. Secondly, we were relieved to see that common sense isn’t broken. As a technology company, so many teams come to us looking for a silver bullet, but the reality is that you have to put in the hard work. 3. What are the biggest changes you've seen in China's social media landscape which will directly affect international sports brands in China targeting new fans? The social platforms are reaching maturity. A few years ago just simply creating an account and publishing some content delivered results, but now there are millions of other brands doing just the same thing and just showing up is no longer enough. In the West we’ve been in this stage of digital overload or saturation for some time, but in China marketing teams are struggling to raise their game and adapt to this period of more steady growth.
4. Content is seen as king. Judging from your report, how important is content and what should clubs, leagues, federations, and athletes be doing with it?
The data clearly shows that great content delivers disproportionate results, meanwhile poor content does more harm than good. Despite the increasing complexity that the digital world brings, marketing is still fundamentally about connecting with the user and creating value. On WeChat this is more true than perhaps any other social platform. Tencent is not heavily dependent on advertising revenue from brands so WeChat is very much their kingdom and you have to play by their rules. They restrict how much brands can publish and make it easy to unfollow accounts, all of which incentivises accounts to do better. In recent years there has been a perception that content is commoditised, often just set as a KPI “publish X posts”. When the top 2% of WeChat articles are read 44x more than the average and the bottom 50% is worse than saying nothing at all we clearly need to rethink this approach. Teams should be resourced and incentivised to focus on quality, not quantity.
5. What advice would you give to new or existing sports accounts looking to engage more fans in China?
Be patient and listen. You have to be here for the long term and realise that there are a lot of lessons to be learned along the way. China has grown at a breakneck speed and everything is struggling to keep pace not least of all its citizens. An entire generation of Chinese has more money and time than ever before and they’re desperate to spend it, but unlike your fans back home they know close to nothing about your brand.
You almost have to build your brand from scratch, educate your followers, listen and learn from them and take them on a journey to becoming fans.
Read more about the report on Campaign (Chinese) and The Drum (English)
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Mailman is a global sports digital agency and marketing platform. We help global rights holders, athletes and brands build a successful business across China, Europe, and Southeast Asia. Learn more about our story here.