CHINA TRIP, CEO

Trip to China May 7-13

I enjoy going to India and China back to back and experiencing the huge difference between these two massive countries. They could not be more opposite of each other in terms of mentality of people, infrastructure, way of life and how people operate in business.

I don’t mean to say that one is better then the other but just vastly different in their approach. One thing is for sure, China has a superior infrastructure, the airports, highways, etc are world class and it shows the benefit of having a centrally controlled government system. So while India was voting this week and is being proud of being the largest democracy in the world, China decided to build a few world class cities linked with high speed trains, highways, etc. I guess just different priorities.

Anyway, I was here to catch up with our China Team in Beijing and spend time with our client (BWF) at the Sudirman Cup in Guangzhou. Had good meetings with CCTV and Li Ning. CCTV 5 (sports channel) is still in its old office and waiting for the massively new super Tower to be completed (I think it was suppose to be ready for the Olympics last year, what happened?). CCTV 5 is clearly the dominant sports channel in China and an important client of ours. The sheer reach of the channel is amazing but ratings for certain programs are not as high as you would think. International football is easily beaten by local table tennis or other more indigenous sports. The NBA does off course do pretty well with Yao Ming leading the charge.

I was very impressed with Li Ning’s campus like office complex. You can really see here is a new NIKE emerging. Besides having a fully interconnect office complex, the campus houses major facilities for key sports Li Ning is involved, ie. an entire hall for badminton, table tennis, swimming pool, football fields, basketball courts, you name it, they got it. And it’s free for employees to use.

Li Ning, is Chinas answer to Nike. The company was founded 20 years ago by the former Olympic Gold Medal Gymnast Li Ning and today is a billion dollar company and produces sports apparel, shoes and rackets for many major sports in China and sells them in over 6,000 retail outlets across the country.

Li Ning recently entered Badminton and took over the sponsorship of the Chinese National team and became the title sponsor of the Sudirman Cup. Yonex the dominant brand in badminton should watch out as these guys are serious. Off course competition in the market is always good for business.

We had a good meeting and toured the facilities and are currently in discussions on a variety of projects. More on that when they happen.

In Guangzhou at the Sudirman Cup, I had the opportunity to participate in BWF’s (Badminton World Federation’s) annual general meeting (AGM). It’s always interesting to watch the politics in sports unfold, especially when you have a commercial interest in the sport. Watching from the sideline to see how votes are being ‘gathered’ is quite unique and I’m glad I’m on the other side of the equation.

The AGM went much more quietly then the last one in Indonesia a year ago and no major upsets or changes occurred. The incumbent president, Dr. Kang from Korea retained the leadership and his group of loyal lieutenants took on key positions in the federations. A few new faces where voted into the Council and several changes where made to the various working committees. I’m confident that the sport will see more stability now for the next four years which should be good for everyone involved.

We look forward working with the old/new regime and supporting them to take the sport to new heights. Badminton has some great potential but also its work cut out to compete with the other dominant racket sport (tennis). There are several opportunities and challenges at the same time.

Asia is the dominant market place for Badminton with China, Malaysia and Indonesia leading the charges in terms of popularity. This is good and bad as these countries continue to dominate the sport and only occasionally Denmark and Korea challenge this order. Having weak teams from Europe and the USA does not help the sport with its global ambitions. On the other hand, having a strong Asian presence provides a unique platform for Asian companies and broadcasters in our territories.

Korea is a strange apple, it has a strong national team and individual players but the sport gets no recognition within the country. It’s one of those strange things and similar to Field Hockey in Korea (again Korea is one of the top teams in the world) but no one cares about it in Korea. The only explanation I have is that Korea has a very strong development program for Olympic sports which produces world class athletes but in some cases these sports are not necessarily automatically popular with the general public. The big sports in Korea are baseball, football and basketball and off course now Ladies Golf (just check out the current ranking of the LPGA).

Being an Olympic sport is very important for long-term development of Badminton, firstly because of the Olympic funding it receives and also being part of the biggest multi-sport event every four years. It gives the sport a big shot in the arm and millions of people around the world will be exposed to the sport. The key now is to build a large enough platform in between the Olympic Games to further develop and drive that interest.
TSA is actively developing some of these areas and we’ll be announcing a few new concepts soon.

BTW, China won the Surdiman Cup, as expected against Korea. Malaysia came third, Indonesia fourth.

Till my next trip.

Cheers

Marcus Luer
Group CEO