THE VALUE OF CHINA’S DIGITALLY ENGAGED SPORTS FANS
Chinese sports fans are the most digitally engaged in the world, and western sports organizations are now creating experiences exclusively for them.
Over the last 20 years, the elite sports teams and leagues have steadily been building a presence in China. This is thanks to an increasing number of teams taking part in pre-season tournaments in the country and hosting branded events in major cities throughout China. However, the Covid-19 pandemic has abruptly halted those events and forced organizations to innovate.
As sports organizations look to expand their reach, it is not hard to see why they would focus on the untapped potential of China.
The nation is home to 1.4 billion people. If a sports organization were to capture even a fraction of that population, the potential revenue from ticket sales, merchandise, and broadcasting rights could be significant.
“American sports brands salivate at the chance to credibly penetrate the Chinese market,” says David Carter, executive director of the Marshall Sports Business Institute at the University of Southern California.
For European soccer leagues, the opportunity is also appealing. As the country is home to
around 237 million people who consider soccer their ‘favorite sport,’ while 308 million watch soccer ‘at least once a week.’
Moreover, China also offers a growing number of affluent households. This has led to China becoming the world’s biggest spenders on luxury brands in 2012. While sportswear brands such as Nike now see around 10% of the company's revenue coming from China.
Compared to other countries Chinese citizens are more active on social media. On average Chinese users spend an average of five hours and 50 minutes per day using social media. In the U.S. this is much lower at around 3 hours and European users spend even less time, at around 1 hour 50 minutes on social media.
Chinese fans are also the most active on social media, with 57% posting memes, video clips, and images online, compared to an average of 40% across the other countries such as the UK and Brazil.
Chinese fans are also the most active on forums and in group chats, with 43% chatting to other fans. This is a much greater engagement rate than any other country with Brazil being the closest with 38%.
Despite all of this engagement Chinese sports fans have proven to be less tribal, and will often follow individual players. Therefore, this means that the large audience is still up for grabs.
Sports organizations have mostly been utilizing a basic fan acquisition strategy, to grow their fan bases in the country. However, this strategy has seen teams and leagues struggle to monetize the initial investment.
The biggest mistake seen is that clubs will acquire fans by the bucket-load and expect that high numbers of impressions leads directly to monetization. However, more often than not this is proven not to be the case due to shortcomings in a few key areas.
David Hornby (@HornbyChina), vice-president, sports at Mailman, said that WeChat, with its one billion daily active users, is misunderstood by most sports organizations.
While most commonly associated with its messaging function, Hornby notes that WeChat is in fact a CRM tool, and stresses that clubs need to ensure they engage with fans effectively via WeChat in order to monetize any engagement.
Therefore, sports organizations must develop a unique proposition for Chinese fans. While star players and the culture of a teams’ home city can certainly be a draw, players get traded and many fans may never visit the city in question, so there needs to be a deeper, more meaningful connection. What are the core values and timeless themes of the club that are likely to resonate with Chinese fans on a deeper level?
“You can’t just send them content – they can get that anywhere else,” explains Hornby. “You’ve got to have an actual value-add offering if you’re going to target someone directly."
Once established, clubs then need to focus on targeted fan acquisition through engaging digital content. This content should be aligned with a unique proposition. Which will bring in a better quality of fans, although less in number. These fans however will have greater loyalty, with a higher engagement rate, and ultimately will spend more.
Drive loyalty through CRM segmentation and re-targeting. Build sub-communities and enable fans to share their knowledge and learn about their players and the club.
Only once the brand and community has been properly established, should clubs turn the focus to monetization.
One revenue source is to sell directly to fans. Engaged fans will want the latest authentic kit and will spend to take part in exclusive events (offline or digital). Merchandise accounts for 50% of all spending from Chinese sports fans.
WeChat is a valuable platform for e-commerce in China, and the majority of sports organizations have yet to realize this potential. Most clubs still rely on their main global channels, which for fans in China means higher prices for merchandise, large postage and packing fees, longer delivery times of up to four weeks, and styles of clothing that may not be suited to the Chinese market.
“If you’re not competing with local brands that are selling products here, how do you expect to win?” Hornby adds. “It’s a big area that needs cleaning up.”
Only six European soccer clubs currently have a local e-commerce presence in the country: Barcelona, Real Madrid, Bayern Munich, Liverpool, Manchester City and Tottenham Hotspur.
Another key revenue driver is creating rights holder value. In exchange for higher fees, clubs give sponsors access to saleable assets on digital properties, exposure rights at events, brand rights in China, and player rights for influencer endorsements. A report revealed that 65% of Chinese sponsors fans intend to buy products from a football club’s official sponsor.
LaLiga is one organization that has enhanced its fan engagement opportunities in China through its partnership with social media platform Douyin, which is branded as TikTok outside of Chinese markets.
As part of the deal, Douyin became LaLiga’s official social media partner until March 2021 with the Spanish competition’s content now being made available on the social network.
Alfredo Bermejo, Digital Strategy Director at LaLiga, stated “With this agreement LaLiga goes one step further in its internationalization strategy in China, a priority market for us in which the digital presence of our clubs doubled last season.
“We are very happy to be the first league in the world to sign this kind of deal with Douyin, which will allow us to reach new audiences and give maximum visibility to our clubs on the short video platform.
“More and more LaLiga clubs are firmly committed to having a presence on Douyin; Atlético de Madrid, FC Barcelona, RCD Espanyol de Barcelona, Real Madrid, Real Sociedad and Valencia CF are some of the clubs already present on this platform.”
Ye Jueming, Douyin Sports director, added “As a social media platform with great growth and potential we’re proud to reach this cooperation agreement with LaLiga, one of the most important championships in the world. We seek to promote the sport through our technology, which will allow contents, materials and challenges to reach a greater number of fans, allowing them to strengthen their relationship with the tournament.”
This year, Douyin reached 400 million daily active users in China, meanwhile, LaLiga’s official channel has 1 million followers highlighting the growing popularity of Spanish soccer in the country.
The NHL has also set its sights on building on its social media presence. Currently across Weibo, WeChat, Douyin (Tik-Tok), and Toutiao the league has a combined 1.5 million followers. The NHL's Chinese engagement strategy involves enlisting fans to act as content creators and ambassadors for the ice hockey league.
The so-called ‘fan leaders’ will be expected to watch NHL games, share official NHL content on social channels, collaborate and create content, create and manage NHL fan clubs, and participate in NHL China events.
NHL vice-president, international marketing Joe Loreski said “Engaging our fans across the globe is of paramount importance….The NHL fan leaders program demonstrates that objective in China, as we will identify and collaborate with those that display the enthusiasm and initiative to engage hockey fans with fan-driven content and commentary, delivered via the NHL’s growing social media channels.”
So far the NHL's efforts have included exhibition games and sending Washington Capitals' Alexander Ovechkin (@ovi8) to spent a week in Beijing to act as an international ambassador.
Sports organizations can also build revenue on engagement through digital membership schemes for Chinese fans, although only a limited amount of elite teams have gone down this route, so far.
Arsenal is one team whose membership scheme is paying dividends. Introduced in 2015, the membership scheme has three levels: full access, charged at CNY268 $39 per year; basic at CNY49 ($7), and a free membership option.
Members gain access to early bird ticketing for Arsenal tour matches in China, as well as coupons, discounts, and a special membership gift package for those with full access.
Manchester City is a team tat followed suit when it launched its Chinese Cityzen system in 2018. The program is free to join. Members are exclusively invited to offline fan events, while other benefits include coupons for watching matches online for free via digital broadcasters such as PPTV; merchandise coupons for items such as official team jerseys and localised T-shirts; and incentives such as prize draws.
FC Schalke 04 introduced a scheme on football app Dongqiudi in 2017. It is a paid membership available exclusively via Dongqiudi with two levels: premium membership, charged at CNY619 per year, and basic membership at CNY149.
Members at both levels receive a membership card, virtual sticker, and icon in the app, along with coupons for discounted merchandise, and an official team jersey for premium members, and official T-shirt with a basic membership.
A Red Card report stated that digital memberships developed by Arsenal and Manchester City have “proved that offering a membership package tailored for Chinese fans within an existing China ecosystem have higher chances of conversion compared to the traditional global memberships”.
More European clubs are set to launch membership schemes soon. Benjamin Wahl, head of China at
Borussia Dortmund launched their membership club earlier in 2020 using a WeChat ‘mini-program’ (an application within the WeChat ecosystem). It became the first comprehensive Chinese membership scheme from a European football club to be run solely over WeChat.
“Members will have access to exclusive BVB content and will be able to join BVB fan clubs and connect with each other,” head of China at Borussia Dortmund, Benjamin Wahl said when announcing the membership scheme. “Games, raffles, travel information about Dortmund and merchandise will be included as well.”
In response to canceled events in China and postponed matches back home, sports organizations have had to find innovative ways to connect with fans.
In April, Chelsea live-streamed a digital interactive show, dedicated for Chinese fans, on Weibo and Douyin, that had 7.5 million views and 2 million hashtag reads.
The two-hour broadcast featured historical footage, special guests, a musical performance, influencers, giveaways, behind the scenes footage, and fan Q&As.
In May, when the Bundesliga season restarted, Dortmund hosted an offline fan event in Shanghai to view the Dortmund vs Schalke match. The two clubs also collaborated to live-stream the fan event, to allow others to digitally experience the match and the live fan atmosphere in China.
Sports organizations of all sizes are increasingly tapping into Chinese digitally-savvy sports fans to grow their revenues and rights holder value. That said, these efforts take time and investment to properly monetize the new audience.
China is set to be the first country to trend toward normalcy after the pandemic, therefore, it is important for sports organizations to continue to develop its connections with fans across the country, building equity for their brands and creating opportunities for all stakeholders.