The China official online store of Argentine Football Association (AFA) was launched online at 12:00 on April 15, Beijing time. By 12:00 April 18, AFA Chinese official store, which had been launched for only three days, had sold more than the monthly sales of Real Madrid China store and Manchester City China store together, the two stores have been operating E-commerce business in China for a time and was leading the market.
Before AFA China official store, the leading international football organizations that have commerce business in China (except Inter Milan, which is now owned by Suning, a Chinese E-commerce platform), is Real Madrid China online Store, and Manchester City FC China online Store. Real Madrid China online Store has a total sale of 417 items last month, and Manchester City FC China online Store has a total sale of 251 items last month. The launch of AFA China official store raised excitement among many Chinese football fans. By 12:00 April 18, the store has sold 771 items. Within 3 days, AFA China official store has break the sales record. Whilst Real Madrid and Manchester City are working with international partners, AFA chose to work with a local partner Beijing All Star Partner Communications Co., Ltd (ASP).
We had an interview with the ASP team from Beijing, including CEO – Bin LUO, Vice President – Yanyu ZHENG and Senior Manager – Ye JIN, to see what their secret is.
Popularity among chinese fans
Q: Could you give us a brief introduction of All Star Partner?
Bin LUO, ASP CEO: ASP is located in Beijing, China. We focus on branding and commercial development for international sports organizations and athletes in China. Our mission is to help sports properties, so-called sports IP, to get involved in the booming Chinese market, and achieve both branding and commercial success in China. To be specific, we help with sports IP with digital operation, commercial development, and E-commerce development.
Q: In recent years, the development of Chinese sports market has attracted worldwide attention. What is your main business in this market?
Bin LUO, ASP CEO: The Chinese sports market is getting a lot of attention for sure, but to be honest, it is an emerging market and it was only since 2014-2015 that the Chinese sports industry started to develop really fast. If you use the same kind of strategy or experiences based on the success in the western mature market, there will be various problems of inadaptation. We have noticed that some global sports brands are doing many things in China, but a lot of the times they don’t really work. The most typical phenomenon is that major sports IP have flooded into Chinese market for brand building and they have tried many ways with social media operation, while the returns are less than their expectation.
So, what do we mainly do in this market? We sign agreements with the sports IP including athletes and organizations and offer services for these clients. The key point of our service is that, we do not rely on service fee for branding or digital operation, although we know that this is usually the business model for agencies.
We do our work based on our study of the IP’s brand and value. Our business is divided into two aspects. One is branding, for this part, we would invest together with our clients, to build a comprehensive brand image, and awareness, as well as a larger fan base in China. The other one is commercial development, which we also consider to be more important. Our commercial development for IP, includes sponsorships, business events, as well as sports licensing and E-commerce. The Chinse E-commerce system we built for AFA is a typical example.
“If you use the same kind of strategy or experiences based on the success in the western mature market, there will be various problems of inadaptation”
Q：Can you give us some examples of the cases that you have done? How do you think of these cases?
Yanyu ZHENG, Vice President of ASP: We’ve been helping our clients find business opportunities. Last summer, we had commercial activities for Kyle Kuzma and a one-week China tour for Rivaldo. Recently, we have helped Gordon Hayward to reach a deal with Chinese Chair company AutoFull. As for the licensing and E-commerce, we have built a comprehensive E-commerce system for AFA, which shows a rapid development after the launch.
At present, there is a huge contradiction between supply and demand in sports rights and sports marketing in China, and we have a team with dedication to help our clients finding opportunities here in China. And for E-commerce development, we are also willing to invest together with our clients, we want our partners to know that we believe in the market, and we will grow the business with them, instead of charging service fees.
“Compared with case-by-case cooperation, we are more interested in building a long-term partnership with our clients, in order to achieve the common interests, and ultimately to the common success.”
Q: Many agencies has a business model of service fees, why are you willing to invest with your clients?
Yanyu ZHENG, Vice President of ASP: The key reason is that we truly believe in the Chinese market, and we understand how this market works. We are confident of the long-term growth with our clients. The number of Chinese sports population has exceeded 470 million, and is still growing. The more important thing is we know the numbers, and we understand the complexity and essence behind the numbers.
After signing agreements with our clients, we would have a basis for long-term partnership. And we will have the same target. Only when we help them to be successful in this market, can we achieve the real success as well. So we actually like it that we invest our talents, resources, and even capital in branding and marketing for the IP clients. In terms of E-commerce and licensed products, our investments includes more, for example the supply chain, logistics, marketing and operation, and so on.
There’s a lot of dirty work doing what we do. There’s public relation management, content production, social media operation, fans community maintenance, etc. Our commercial development for clients involves even more, legal, tax, promotion, marketing, supply chain management, protection of rights and so on. We love to devote ourselves to all the work, and we believe in investing on the long term growth of the Chinese sports market.
“Vice President of ASP: The key reason is that we truly believe in the Chinese market, and we understand how this market works. We are confident of the long-term growth with our clients.”
Q: Let’s talk about E-commerce, What’s the right thing to do in China? Why is AFA China official store breaking the records?
Yanyu ZHENG, Vice President of ASP: First of all, our sincere gratitude goes to the Argentine Football Association, who is a perfect partner and the best client you can ask for. Argentine football is a glorious brand with such a long history, great honor, and obviously, a large fan base all over the world.
Also, we have great support from AFA and they put a lot of trust in our work. With the patience and flexibility, we were able to really make a strategy that is fully adapted to the Chinese market. Our understanding and methodology could be best applied to the E-commerce development for AFA.
Sports licensing E-commerce is a very comprehensive and complex system. The digging of IP value, supply chain management, the strategy of products selection and aesthetic design, the establishment and maintenance of fan community, logistics optimization, intellectual property protection, marketing and promotion, to name a few. These are all important works leading to a final result. The Chinese market is especially challenging, because Chinese customers have been enjoying the great convenience of E-commerce for years. We would not say that we are the best, but we are doing the E-commerce development with great respect for this market. We go deep in the details, and we know we can bring even better results.
“Argentine football is a glorious brand with such a long history, great honor, and obviously, a large fan base all over the world.”
Official Products for Chinese Fans
Q: We are talking about the complexity of E-commerce, and obviously there’s a lot to talk about. Can we go deeper with this?
Bin LUO, ASP CEO: Of course. Let’s take one aspect for example. How do we explore the value of the IP and use it in the official products. There’s one well-known IP in China that has reached great success in licensed products. They had more than 1.5 billion CNY (around 220 million USD) sales revenue in 2016 alone. This IP is the Forbidden City.
Most people would think that the Forbidden City’s success is because of their IP’s uniqueness. And they are not wrong. But if you go back 10 years ago and ask someone which IP’s licensed products would be most successful, the Forbidden City might not be their first pick, it’s too conventional and not cool. The Forbidden City is unique, but so is the Great Wall, and yet the Great Wall doesn’t sell many licensed products. Manchester United is unique, but so is FC Barcelona. You can see there’s always more reasons behind the obvious one. In AFA’s partnership, we did lots of work to explore the value of IP, and we use our learning in the products.
In the very beginning, we did a full study on the profile. We went to most of the Argentina fans clubs in China, and many football fans in general, and we got to know their interests, their habits, and their passion. There are lots of questions to ask when we try to figure out how people sees the IP’s value. What do they like most about the Argentina team? What’s their most unforgettable memory? What’s the strongest connection they have with the team? And we also asked a lot of questions about the consumer market. In which categories people care most about quality? In which categories people care most about brand? How do Chinese fans enjoy sports in their actual social life? What kind of design can awaken their passion for sports? Each one of these questions are important, before we get started with E-commerce, we need to fully understand these questions.
Ye JIN, ASP Senior Manager: Yes, and we can use supply chain management as another example. We all know that manufacturing in China has many advantages, we have all kinds of factories. And right now Chinese manufacturing is upgrading and many factories are facing transformation. On this occasion, our supply chain management is facing greater challenges. We need to find the top factories. The quality control needs to be stable and reliable. In the past months, we went to many factories all over the country to find the best partners, to find those with long-term production capacity, with intellectual property protection awareness, and they have leading quality of their products in the industry. The supply chain management is now one of our strongest advantages.
Bin LUO, ASP CEO: That’s correct. It all comes down to one principle, to respect the market, respect the consumers, and make great products.
“The Forbidden City is unique, but so is the Great Wall, and yet the Great Wall doesn’t sell many licensed products. Manchester United is unique, but so is FC Barcelona. You can see there’s always more reasons behind the obvious one. In AFA’s partnership, we did lots of work to explore the value of IP, and we use our learning in the products.”
Q: What do you think of China’s sports licensing market? What’s the future in your eyes?
Bin LUO, ASP CEO: It’s a very exciting market. As we’ve mentioned, China’s sports population is over 470 million, but for years and years this huge number of fans have never really enjoyed fine products and services in sports licensing and E-commerce market. The top global sports organizations usually only offer few product categories to the Chinese market, most of times there’s only jerseys and socks. Obviously, they can’t meet fans’ needs.
In addition, only a handful of global sports IP have launched their e-commerce in China, and they are built on the model of so called “overseas stores”, these overseas stores’ shipments offer poor shopping experience for Chinese consumers. Few categories, low efficiency logistics and tariffs have all made Chinese consumers unsatisfied, and they want more, they want better.
“What we are doing right now, is that we help sports IP to build a direct connection to the Chinese market. The products are designed and produced in China, the consumers are in China, the logistics are in China, the operation team is also in China. Fans will have great shopping experiences in this new model. With the largest sports population in China, we are developing more interesting categories than we ever could. This is the change we are making to make the market better, and we are mostly proud of.”
ASP Wins the first Prize of CCBN Competition, China’s leading Cultural and Technological Innovation and Entrepreneurship Contest, hosted by China Content Broadcasting Network (CCBN)
Q: What’s All Star Partner’s next step on sports licensing and E-commerce?
Bin LUO, ASP CEO: Thanks to AFA, China’s Argentina fans are enjoying great products and services now, and we will keep making them happy and satisfied. For the Chinese sports licensing market, we certainly hope that more global sports organizations and athletes will see it and work with us to pursuit for great success. It’s a challenging market, we are very confident about it, and we want to share our confidence.