Chinese companies in Australia are developing sophisticated branding strategies to reflect their growing presence in the region, writes Sophie Loras.
You don’t have to be from Melbourne to know the Hisense Arena. In fact anyone who follows tennis, cycling, netball or basketball – just to mention a few of the sports regularly hosted at the arena – will have consciously or subconsciously registered the name of one of China’s most iconic electronics companies.
Completed in 2000, the multi-purpose indoor-outdoor facility, situated in the heart of Melbourne, hosts not only sporting competitions but a large variety of events and performances. This year alone, aside from international events such as the Australian Open, high profile acts lined up for the arena include Disney on Ice and the Smashing Pumpkins.
For Hisense, which entered the Australian market in 2006, signing up for the multi-million dollar deal to secure the arena’s naming rights from Vodafone in May 2008, was a huge investment.
If part of the company’s strategy was to broadcast the Hisense name into the minds of the Australian public, as well as helping to demystify the image of Chinese-made, and Chinese-branded consumer products as cheap and of poor quality, then its branding strategy has likely paid off.
By 2010, two years after signing on for Hisense Arena, Hisense Australia was voted Canstar Blue’s Most Satisfied Customers Award for its LCD televisions.
The award, said Hisense Australia’s Managing Director Kevin Ke, was a timely acknowledgement of the efforts put in by the company to ensure its customers were receiving the best quality electronic goods at the best value.
“This award is particularly valuable to Hisense because it is given by the people whose opinions we value the most – our customers,” said Mr Ke at the time of the award. “We are delighted to see that our work is paying off and that our customers are reaping the rewards.”
*Pictured: The Australian Open attracts global coverage when it is held each year in the Australian summer at the Hisense Arena. (Courtesy Melbourne and Olympic Parks)
Like many other Chinese companies recently entering the Australian market, Hisense has sought big-buck sponsorship opportunities to project its name in Australia, demonstrating their eagerness to put their money where their mouths are.
It is the old-age strategy Red Tape Consulting’s Tom Parker calls “spending money to make money.”
Mr Parker is Red Tape Consulting’s director. He’s also the Strategic Relations Manager for the Melbourne Football Club.
Melbourne Football Club was one of the early AFL teams to recognize the potential for business links with China – establishing relations initially through a Melbourne-Tianjin sister city relationship and then embarking on its first China tour in 2007.
To date, however, no AFL team has managed to secure Chinese sponsorship, and competition for the financial support of these Chinese companies’ in Australia’s sporting arena is becoming increasingly fierce.
A key example is a deal signed in March, between Chinese technology giant, Huawei and NRL team, the Canberra Raiders. The two-year sponsorship deal is worth approximately $1.7 million with the possibility of an extension into a four-year deal. The partnership was signed amongst some controversy, with Huawei having withdrawn several months earlier from a sponsorship deal with the ACT Brumbies.
*Pictured: China’s Huawei recently signed a two-year, $1.7 million sponsorship deal with the Canberra Raiders. (Canberra Raiders)
It was also overshadowed by Huawei’s high profile blocking earlier in the year by the Australian government to tender for the National Broadband Network, after it was alleged the company’s Chinese government connections posed a threat to Australian national security.
If Huawei was phased by that decision, its signing with the Raiders suggested otherwise – that it was committed to Australia – for the long term.
“The Canberra Raiders and Huawei are working toward developing a relationship that keeps at the forefront the commercial and emotional objectives of both organisations,” said Canberra Raiders’ Commercial Marketing manager Spiro Tsiros about the Huawei sponsorship deal.
“During our short time as partners, we have worked to achieve many firsts, not the least of which was becoming Huawei’s first major sports sponsorship property,” Mr Tsiros said.
Mr Parker says sports sponsorships provide more platforms than traditional advertising and there are no shortages of willing Australian clubs putting their hands up for deals.
“From a Melbourne Football Club perspective, we’ve been actively seeking Chinese sponsors as part of an overall China strategy for some time,” says Mr Parker.
Mr Parker says that as two-way trade and investment into Australia increases, the numbers of Chinese retail brands are also increasing their presence. He says that for many of these Chinese companies, Australia represents a lot of small markets, small volume sales and increasing regulation, but the advantage is being able to use Australia as a testing ground for rolling out global brand strategies.
He points to Korea’s LG sponsorship of the Melbourne Football Club during the 1990s after it underwent a renaming exercise from its Lucky Gold Star name to then embarking on a global LG branding strategy.
Mr Parker says that in the past, the only presence of Chinese marketing strategies used to be in-store or sponsoring Chinese community events such as Chinese film festivals – “nothing mainstream.”
*Pictured below: Sandra Chipchase, chief executive of Destination New South Wales with Mr. Tan Wan’geng, Party Secretary of China Southern Air Holding Company and President of China Southern Airlines and Sydney Festival’s executive director, Josephine Ridge. (Jamie Williams)
Today they are sophisticated and range from sponsoring sporting clubs to sporting and charity events, stadium naming rights to more mainstream events such as China Southern Airlines’ $600,000 sponsorship of the Sydney Festival.
“There’s a perception that Chinese made goods are of lesser quality, but as Chinese goods increase their global presence, it will be less than 20 years before they are perceived as the same as other products,” says Mr Parker.
China Southern Airlines has been one of the big movers over recent years in terms of gaining brand awareness in the local Australian market.
To date, China Southern has a two-year deal to sponsor the Sydney Festival and more recently added a Twenty20 cricket charity series to its growing list of Australian sponsorship. It made its first foray into Australian sport, signing on as the major sponsor to a new cricket tournament between Australia and India – two of its most valued markets. The China Southern Airlines Tournament, Twenty20 charity series will take place every two years, beginning in Sydney in October with Cricket NSW and the Mumbai Cricket Association competing for the NSW Maharashtra Cricket Cup.
“We know how important cricket is to India and Australia and China Southern is proud to be able to use our international network to bring Mumbai’s best cricketers to Sydney for the inaugural match of this very exciting new Twenty20 cricketing series,” said China Southern Regional General Manager Australia and New Zealand, Henry He.
Mr He says the airline’s marketing strategy is to identify areas where people are likely to gather travel ideas – therefore providing prizes for Gourmet Traveller in partnership with the Chic Collection who produce high end itineraries to Europe, incorporating China Southern business class fares. It also sponsors fundraising events such as the Cure for Life Gala Ball.
Mr He, said the company was being increasingly approached by event organisers in Australia for sponsorship and prize support.
By 2015, the airline plans to operate 55 weekly flights to Australia and New Zealand. In a company statement, China Southern said it sees its growing Australian operations as a test bed for its global expansion strategy, for the first time appointing external PR and marketing companies in an overseas location and purchasing a building in Sydney’s CBD to house a call centre and further cement ties between the two countries. ■
*To read a case study on China Southern’s marketing strategy in Australia, click here.