Can you afford to ignore Asia?

Posted by in Asia, Commercial, Helen Soulsby

Over the past 12 months, it has been impossible to avoid the sense that there is a shift in strategy underway in Asian sport. Take football as a case study; no longer is it just ageing players seeing out their twilight years in the Chinese Super League, this season saw Chelsea’s Ramires, Atletico Madrid’s Jackson Martinez and coveted Shakhtar Donetsk midfielder Alex Teixeira all head east for a combined £90m in transfer fees alone.

It’s becoming increasingly clear, and perhaps alarmingly for internationally recognised clubs involved in the region, that the days of China as an emerging market are fading. Clubs need to act quickly and effectively to ensure they are not left behind.

For all their might and financial muscle, many western sports and brands have struggled to lay down a deep-rooted and commercially successful presence in Asia. One obvious exception is the NBA, who have played matches in China since 2004, and built formidable media and content partnerships to establish a core supporter base.

However, many rights holders have tried to ‘dip their toe in’ and have only focused on a sponsorship deal or one-off tour, which certainly delivers short term spikes of mania but perhaps not the lasting fan engagement and commercial results sought.

NFA in Lion City CupIn my Singapore-based role at SRi, I regularly consult with clubs and federations looking to build their presence in Asia. What we’ve found is that copying and pasting US or European models simply won’t cut it. It’s the strategic, long term approach that rights holders and agencies need to take. And there is no substitution for volume; particularly in China, organisations need to be well resourced to make full use of the opportunity.

There are many considerations to be made. More and more organisations are seeking localisation in specific markets, however to do this effectively comes at significant cost and patience, and must be justified with a solid business case.

Organised sport in Asia is incredibly varied within each market, with governments often having significant influence, particularly where investment is concerned.

Business models vary significantly due to the complex mix of entrepreneurialism and traditionalism in many Asian countries. While the sophistication of the industry may not be at the same level of the West, each market is on a different path, which will need a different approach and the results will be different.

As mentioned previously, some have gone for a ‘test the water’ approach, but without significant buy in at Board level, this can be difficult to scale up, particularly without substantial further investment. Sports teams, brands and federations aren’t just competing with others in their own industry. Many other industries are exciting and enticing to Asian youth so, on both a consumer and talent acquisition level, sport struggles to get heard.

IMG_6957One of the reasons that the NBA is successful is because it established a physical presence in Asia and sought to understand the idiosyncratic demands of the market. They have managed the balance between sales (games, shirts, posters) and fan engagement (player appearances, social interaction) and have been creative, as well as locally relevant with their content strategy. They were early-adopters of a digital mind-set, which not only helps the brand span such a vast landmass, but also taps into that cultural interest in technology and media.

It’s important to secure strategic and business partnerships to gain scale and allow your organisation to penetrate the market effectively. This might be through the media, where again, the landscape is considerably different to western territories, or through trusted local brands and bodies – one of the hardest hurdles to overcome is gaining regional trust. Asia is proud to beat its own drum in business and sport, and it’s the incoming organisations who respect that cultural outlook that will win out.

Asia is an incredibly exciting region to be involved in, and done well, the benefits can be boundless. For all considerations above, it still comes down to three central tenets, key in so many areas of life – time, patience and investment. If companies can get these right, starting with their strategy and then by hiring the right people, with the right experience, and local knowledge, then they can take full advantage of a dynamic business landscape that still has so much to offer.

Helen Soulsby is managing partner for Asia at SRi, and an expert in business, resource and relocation strategy across the Asian region. To learn more about the opportunities and any of the points mentioned in the blog, please contact hsoulsby@sriexecutive.com.