In the young field of sports marketing, foreign firms have an opportunity to help steer the course of athletics in China

----By James Roy

The story is a well-known one. On a balmy August night in 2004, at the Athens Olympic Games, 21-year-old Chinese sprinter Liu Xiang came seemingly out of nowhere to equal the men's 110-meter hurdles world record and turned into an instant national hero back home. Now, Liu is a ubiquitous marketing marvel: on soft drink cans, plastered on billboards and the sides of buses, and on television, flirting with pop starlets.

A Nike TV commercial that aired soon after the event struck just the right note. The ad shows footage of Liu striding to victory, with the words "Asians lack muscle?" appearing on the screen, followed by "Asians lack the will to win?" Finally, we see the Nike swoosh logo on Liu's shoulder, with the stirring tagline "Ste-reotypes are made to be broken". With that, Liu was simultane-ously made a symbol of Chinese national pride and hip youth culture, and companies are now leaping at the chance to attach their brands to his celebrity.

But they aren't just interested in Liu Xiang. Public enthusiasm for sports in China has grown along with the country's success in international competition. Athletes and athletics are becoming an increasingly popular vehicle for foreign and domestic brands to promote themselves in the Chinese market. But sports marketing is still a young business here, and companies' attempts to position their brands around Chinese athletes can run into obstacles when dealing with the state-run bodies that control them.

Race for the prize

Sports in China began to wake up in the early 1980s after a decades-long period of hibernation, during which every Olym-pics since the 1952 games in Helsinki was boycotted. The un-derdog story of the national women's volleyball teams of the 1980s, which unexpectedly won world titles three years in a row, capped off by a gold medal in the 1984 Olympics in Los Angeles, held the nation's attention and inspired celebrations in the streets of Beijing.

But there was still little to no concept of professional sports or the athlete-as-celebrity until the mid-90s, when China's first professional football and basketball leagues were founded. From its inception in 1994, the Marlboro League (football) enlisted American sports mar-keting giant IMG to represent it commercially, as did the Chinese Basketball Association (CBA) soon afterwards. While the government wasn't looking, teams began signing endorsement contracts for foot-wear and apparel, and the leagues won a measure of autonomy from the state-run federations that govern Chinese sports.

Sports are still dominated by government ministries and federa-tions, all under the umbrella of the State Sports General Adminis-tration (SSGA). Athletes are recruited into the system at a young age and attend special sports schools, where they go through rigorous training all the way through to the university level. The government provides their food, accommodations and coaching, and pays elite-level athletes salaries and bonuses. They have limited freedom to determine their own schedules and personal lives.

But the policy on commercial representation is unclear. "It is so early in the development that many sports don't have set rules on agency," says Tor Petersen, co-Founder of ZOU Marketing, a foreign-owned sports marketing firm based in Shanghai. "They're being written as we go."

Petersen, a former marketing consultant who worked for Nike in China in the early 90s, started ZOU with fellow Nike China veteran Terry Rhoads in 2002. In addition to advising foreign companies that want to enter the China market on strategic branding and market positioning, ZOU organizes events, runs grassroots sports leagues, and advises the CBA. New, smaller companies like ZOU are joining hundreds of new Chinese firms and the more established foreign players like IMG and Octagon in China.

While many athletes do have sponsorship deals - usually with the sports administra-tion acting as go-between in non-professional sports - there appear to be limits on how far authorities are willing to let them go. Two-time Olympic diving gold medalist Tian Liang was unceremoniously dropped from the Chinese national team last year, apparently for indulging too much in commercial activities. In the rush to endorse Liu Xiang after his victory in Athens, Baisha Tobacco Group signed a deal that went sour after cigarette ads with Liu on them were promptly banned by the State Administration of Industry and Commerce.

Sponsors' difficulties with sports authorities have had the effect of making Chinese athletes less marketable on the whole, at least for the moment. "Companies are steering more towards safe bets," says ZOU's Petersen, citing established Chinese stars Liu and Yao Ming and global stars like Ronaldo, Tiger Woods and Michael Schum-acher. "In China right now, it's more difficult to protect your investment."

Unknown commodities

Before the Athens Olympics, Liu was an un-known, even in his own country. Although there had been hopeful whispers in China that he might contend for a medal, practically nobody had heard of the man who would win the coun-try's first ever gold in men's track and field until he stepped on the track. The lack of publicity for up-and-coming ath-letes is a stumbling block. Unlike markets such as the US, where fans can follow new talents as they progress through different tiers of competi-tion, Chinese athletes receive practically no me-dia attention until, like Liu Xiang, they already have career-defining achievements under their belts. In China, athletes are either established su-perstars or nobodies. Making matters worse for potential sponsors, athletes' secluded lifestyles insulate them from the public, leaving potential sponsors almost no opportunity to market their individual stories.

The pressure is on for Team China to perform at the 2008 Olympics. China won a best-ever 32 gold medals in Athens, coming in second behind Team USA, and expectations will be even higher when it competes on its own turf in Beijing. Pe-tersen thinks state administration officials will not want to make serious changes to how they de-velop talent so close to what, in their eyes, is the main event. "The government has no incentive to make large systematic changes right now."

What happens following the Olympics is a different story. "The focus after the Olympics has got to be on the business of sports," says Petersen. "There isn't going to be as much pressure after a successful Olympics to keep the system in place. It's an expensive system to keep in place."

If the focus of the sports industry shifts from training athletes to driving revenue post-2008, Petersen argues, athletic talent can begin to be developed through the normal school system and club teams, and the process will eventually "take care of itself". The result would be a much wider base from which to draw talent, and there-fore more competition. "Over a 20-year period, you could have talent equaling the NBA out of China," says Petersen.

Liu Xiang: Attitude sells

Basketball star Yao Ming is still China's most instantly recognizable sports star, but hurdler Liu Xiang may have more branding potential, at least in his homeland. The 2.26-meter Yao, by virtue of his size alone, is most powerful as a symbol of China's strength, rather than an actual person. But his outsized proportions are also a crutch - fans are not likely to relate to him on a personal level. By comparison, Liu's feats - which represent more a triumph of will and hard work than pure genetics - seem much more attainable to the average Chinese. He has also shown a dynamic, engaging - and slightly rebellious - persona, giving him an edge over the soft-spoken and mild-mannered Yao.