Cracking the Chinese market

What is the value of the sports market in China?

With big international events on the horizon - the Winter Olympics in 2022 and the Asian Cup in 2023 next on the menu - and big plans for a culture ‘defined by sport’ by 2030, China plays a key role in the sports economy worldwide.

A population of 1.37 billion people is a palatable prospect for the leading international sports properties. However, the right formula to “crack” the Chinese market remains elusive.

We asked Deltatre’s Romain Rossi - Vice President of Business Development, Account Management & Sales for Global Football - what is the current picture in the region and what is to be expected over the next few years. The landscape is evolving, with an increased need from China to attract global events and stars to the country in order to grow its profile.

#1. China represents an economic powerhouse in sports. How’s the Chinese media landscape transforming, with new investment and global sporting events on the horizon?

"Thinking about the past five years, we witnessed a very strong acceleration within the whole Chinese sports market. From a cultural perspective, the government has officially deemed sports as a key component for the current and future Chinese society. China has been bidding to host a number of competitions in the upcoming years - the Winter Olympics in 2022 and the football Asian Cup in 2023, to name a few. In parallel, local committees have been working relentlessly to secure other important events, such as football clubs’ pre-season tours, involving top clubs from all over Europe for prestigious, and remunerative, showcase opportunities. Undeniably, football, basketball and Olympic disciplines are leading the trend, with the clear need for China to host events, invest in infrastructure and therefore develop local leagues."

"On the other hand, internationally China, through its flagship companies, has made important investments with the likes of UEFA, FIFA, IOC, and other international bodies, and have big plans for a potential partnership with the NBA. The objective is to provide the world with a different image of China through sports, showing that the market is extremely dynamic, and prepare for the expansion of Chinese sports performances in various disciplines."

#2. What does this mean for Deltatre?

"It means that there is a larger market to be active in, to explore and find new ways to penetrate. Due to the nature of our business, it represents big opportunities and potential. However, the sophistication of the market has not yet evolved enough overall for China to indicate the need of having premium levels of services. The main goal at the moment, as stated before, is to attract new fans, increase awareness and secure the opportunities around events of international caliber. Then will come the improvement of the infrastructure, which isn’t quite there yet. Leagues and sports organisations are fully focused on the high-level business plans - it’s the media rights and hosting rights on top of the agenda. What is clear is the willingness to restructure, expand and develop. It looks like China is probably not ready, yet, to fully open its doors to external suppliers, despite the presence of international players, events and disposable money. The actions taken by the government so far are tangible and looking at both professional sport and at the grassroots, for which major investments have been made in infrastructure, sports schools and athlete development. Deltatre will also monitor this dimension of the sport in the country."

"On a final note, and more on the technological side, China is highly connected, with mobile and social networks that are leading innovation. Sports like football should be targeted and serviced from the perspective of the fans following professional leagues and athletes, as from the perspective of the the millions of people practicing it."

#3. Is OTT leading the technological revolution in sports within the Chinese market?

"An evolution in technology is clearly underway, and it will surely affect sports. I am not entirely sure that OTT is currently at the forefront of this development. The media rights market is still under the belt of state broadcasters. A population of 1.37 billion people, however, serves us with the opportunity to create huge digital solutions."

"Outside of China, a focus on OTT is equally intricate, today. Chinese sports properties are struggling to emerge because of the strong competition of other leagues. Their action is quite limited by a lower international appeal of local tournaments and teams."

#4. Is football to be positioned at the forefront of a plan to create new monetisable audiences or should we direct our attention elsewhere?

"Football is the biggest opportunity. The Chinese government has repeatedly stated that Sports, and football in particular, create communities and strengthens them as a key social construct. China has made no mystery of their solid plans to develop its sports culture with football at its helm, and to host the the FIFA World Cup by 2030, with the more or less hidden objective for China to win it on home soil."

"The already mentioned investment in activities linked to FIFA and UEFA, the development of the domestic Chinese Super League, and the hosting of 2023’s Asian Cup, all give more than one clue of their intention. Obviously, the growth in competitiveness needs to be nurtured, creating local football stars rather than just ‘importing’ them. Football is the primary opportunity for Deltatre too, and it will be even more so in the next few years."

"Besides football, basketball is also a powerful medium with a number of successful Chinese players in the NBA. That’s the reason why we should not limit ourselves to football only, but look at all of the trends and capitalise on China’s increasing interest in other disciplines, among which I’d also mention swimming and athletics. China is a huge country, with a huge following of sport lovers."

#5. What are the biggest differences between the behaviour of fans in the Asian market compared to Europe? How can you maximise commercial value?

"The biggest differences hide in the consumption of content. Chinese audiences are very much fanatics, yet probably more interested in individual players than teams or clubs. They love having ‘heroes’. A Chinese football fan might have been a diehard Real Madrid fan as long as Cristiano Ronaldo played for the ‘Galacticos’, then change their shirt to Juventus’ when the Portuguese player was signed by the Italian club."

"With regards to the way people watch sports, it’s probably safe to say that the Chinese, more than other nationalities, are more likely to consume snippets of a game, rather than sit down and watch it for its entire length. I am talking about an interest that is mainly for short near-live clips, highlights, epic moments, over longer commitments. This is due to the general behaviour, which sees people combining different social aspects in one single moment. Also, as already mentioned, mobile is by far the most used device even when following live sports events. The consumption pattern is close to what we would associate with millennials today; there’s huge demand for ‘bite size content’."

"On a final note, it’s important to highlight the role sports, and football specifically, have in China. They are one of the key social currency, where it’s fundamental to stay current with the latest stories, rather than watching an entire game."

#6. What steps can non-Chinese football leagues take to enter the market? Any examples of success?

"Non-Chinese leagues are moving in different directions. Firstly, they are making sure to develop opportunities for Chinese audiences to experience football locally. Pre-season summer tours have been a vehicle into the country, because they attract fans who can then enjoy some action and see the international stars in flesh and blood."

"On the other hand, the past few years has seen a number of top European federations adjusting their fixtures and schedules to reflect the Chinese prime time. Leading properties have therefore included scheduled games at midday local time, which has been a major change, yet a needed step to attracting Asian audiences during their leisure time. Also, some adjustments are being made on the way sport is distributed, to better reflect changing consumer habits. For example, content is being tailored specifically to fulfil the hunger for the ‘behind the scenes’ - after the 90 minutes of a match, for instance - and with near-live snapshots."

"Finally, in terms of distribution, the mantra has been to tap into the country vast audiences. The likes of UEFA, Premier League or La Liga have chosen to enter domestic pay TV platforms. However, the volume of the audience is still small if compared to the size of the country. An interesting different path has been taken by the LFP, the French Football League, who decided to close deals with CCTV - the national broadcaster in China. Despite lower revenues, the size of the potential audience is much greater."

Closing thoughts

Sports organisations and technology companies are working to identify the best opportunities in a market that seems to be focusing on mobile-first solutions and short form content. 

Will we see China hosting the 2030 edition of the World Cup? Will the forthcoming world-class events help accelerate a process that aims to transform the entire country using sports as a medium? A bunch of questions still remain unanswered, yet it’s clear how the Chinese market represents today a promise land sports organisations and relevant stakeholders hungry to be a part of.