Debating Room - McFun - For Sale - Search - What's New? - Mailing List
11/07/01 . By Jeremy Page . Reuters . Russia
Big Business drools over Beijing prospects
MOSCOW, July 11 (Reuters) - As Beijing's bid to host the 2008 Summer Olympics enters the home strait, Big Business is drooling at the prospect of the largest marketing event ever in the world's most populous country.
China's first Olympics in history promises unprecedented access to hundreds of millions of consumers and lucrative construction contracts as Beijing embarks on a multi-billion dollar infrastructure spending spree.
With the International Olympic Committee (IOC) poised to choose between Beijing, Toronto, Paris, Osaka and Istanbul on Friday, Chinese and foreign firms are lining up for a piece of the Olympic pie.
The IOC's long-standing bank-rollers, such as Coca-Cola (NYSE:KO - news), Eastman Kodak (NYSE:EK - news) and McDonalds (NYSE:MCD - news), all heavily invested in China, have already signed up for the 2008 Games.
But hundreds of other firms, from construction companies and environmental consultants to sports brands and soft drinks makers are waiting in the wings.
Take Nongfu Shanquan mineral water.
Barely heard of overseas, Nongfu Shanquan has established itself as China's top mineral water brand thanks to an aggressive Olympic marketing campaign that has left multinationals standing in their tracks.
By donating 0.01 yuan for every bottle sold this year to the Beijing Olympic bid committee, its maker Yangshengtian Water Co has boosted sales by at least 50 percent in the first half alone.
``As a national enterprise, we are going for gold,'' said a spokesman for Yangshengtian. ``We need some Olympic spirit in our competition with foreign brands.''
The firm is a rare example of a Chinese company using Western marketing techniques to dominate the potentially huge but notoriously fickle Chinese market.
It also offers a glimpse of the enormous potential of the Olympic brand in China.
``They've really broken new ground, this is very new in China,'' said Robert Lee, a partner in Dakoo One to One Marketing, which advises firms on Olympic sales strategy.
``If you ask kids on the street, they know that brand is backing the bid. If you ask kids who else is sponsoring Beijing, they won't even know.''
SPONSORS LINE UP
Yangshengtian is one of 20 official sponsors of the Beijing bid, including U.S. carmaker General Motors (NYSE:GM - news), copier maker Xerox (China) Ltd and Taiwan's top computer maker Acer .
Chinese sponsors include homegrown sports brand Li Ning -- named after its founder, the Olympic gymnastics gold medallist -- and China's largest computer maker Legend.
Under IOC regulations, candidate cities can only make sponsorship deals for the Games after Friday's vote.
But sponsoring the bid itself is a sure way to get a foot in the door.
After the vote, China will choose 10 partners and 10 to 15 sponsors, who will provide $130 million in revenues, according to the bid committee.
``China stands at the threshold of history, determined to open its markets to the corporate world,'' stated a promotional brochure published by the Beijing bid committee.
``The fact that China currently attracts more international investment than any country other than the U.S. indicates the depth of economic interest that would be generated by a national Olympic marketing program.''
Beijing bid officials said they expected total revenues of $1.625 billion from the Games, with costs of 1.606 billion, leaving the city $19 million in the black.
But the economic benefits of the Games run much further.
Goldman Sachs analyst Fred Hu said he estimated a Beijing Olympics would boost China's gross domestic product by 0.3 percent per year from 2002 to 2008.
Hosting the Olympics would stimulate development of China's service sectors, including tourism, transportation, logistics and information technology, Hu said.
A host of property, construction and hotel companies stand to gain from Beijing's plan to upgrade sports facilities, transport links and accommodation.
Hong Kong-listed firms that stand to benefit include TravelSky Technology , Shangr-La Asia Hotels , Beijing North Star , China Resources Enterprise , China Resources Beijing Land and Beijing Enterprises .