- E-commerce market provides big opportunities, but clubs need to use local channels
- Other digital commercialisation avenues include membership schemes, paid content deals, and sponsoring of video content
- Creating online to offline activation through fan events also increasingly important
By the end of 2018, European football clubs had reached a combined follower base of 60 million users on Weibo, China’s giant microblogging platform. According to the 2019 Red Card report, from global sports digital marketing agency Mailman, they had added eight million more just that year.
For many clubs, online engagement is no longer the goal; it is time to monetise these digital fanbases. Opportunity abounds for the clubs willing and able to navigate China’s atypical commercial environment.
WeChat & e-commerce
Tencent-owned social media platform WeChat has over a billion daily active users, but the Red Card report says it has been “relatively under-leveraged by football brands for what will become the platform with the highest rate of conversion”.
David Hornby, vice-president, sports at Mailman, told SportBusiness that WeChat is misunderstood by most clubs.
While most commonly associated with its messaging function, Hornby notes that WeChat is in fact a CRM tool, and stresses that clubs need to ensure they engage with fans effectively via WeChat in order to monetise any engagement.
“You can’t just send them content – they can get that anywhere else,” he explains. “You’ve got to have an actual value-add offering if you’re going to target someone directly, and that has to be through something on the ground, like a ticket or a retail opportunity.”
WeChat is a valuable platform for e-commerce, and Hornby says that clubs have yet to realise this potential. Most clubs still rely on their main global channels, which for fans in China means higher prices for merchandise, large postage and packing fees, longer delivery times of up to four weeks, and styles of clothing that may not be suited to the Chinese market.
“If you’re not competing with local brands that are selling products here, how do you expect to win?” Hornby says. “It’s a big area that needs cleaning up.”
Only six European clubs currently have a local e-commerce presence in China: Barcelona, Real Madrid, Bayern Munich, Liverpool, Manchester City and Tottenham Hotspur.
Bayern Munich was the first to open an official online flagship store for China, on Alibaba-owned Tmall Global in 2015. Though the frontrunner, Hornby says that even Bayern’s e-commerce performance has room for growth.
Other e-commerce platforms in China include Taobao (also owned by Alibaba), JD.com (also known as Jingdong), and short video platform Douyin (known internationally as TikTok), which the Red Card report states will become a popular resource for e-commerce in 2019, thanks to the possibility of linking branded accounts to a Taobao store as well as its own native e-commerce system.
Looking ahead, Hornby says that over the next year or so “the big shift in strategy will be clubs opening local stores, and using local manufacturing, local sourcing, local customer service, at a different price point, and actually starting to create product lines that are just for China”.
Clubs can also partner with sports media platforms such as the popular football app Dongqiudi, which has a vertical e-commerce channel.
Ethan Law, chief executive of Future Arena, a sports IP digital marketing company based in China which works with several top European football leagues and clubs, says that clubs would see greater returns if they set up stores under their respective league brands rather than as individual clubs.
Law believes that “a league would have more negotiation power with a platform when asking about promotion resources to drive users to their page. This would increase the reach and traffic and grow the sales”.
Operating one store under a league brand would also help reduce costs for the clubs, particularly by sharing the cost of paying platforms to direct traffic to a single site; these costs are high in China because about 90 per cent of the e-commerce market is controlled by a handful of players.
No European football league is operating this way right now.
Clubs can also build revenue on engagement through digital membership schemes for Chinese fans, although only Arsenal and Manchester City, among the leading European clubs, have done this so far, with both schemes run via websites and available on different platforms.
Arsenal’s membership scheme, introduced in 2015, has three levels: full access, charged at CNY268 (€35/$39) per year; basic at CNY49; and a free membership.
Members gain access to early bird ticketing for Arsenal tour matches in China, as well as coupons, discounts, and a special membership gift package for those with full access.
Manchester City followed suit when it launched its Chinese Cityzen system in 2018. The programme is free to join. Members are exclusively invited to offline fan events, while other benefits include coupons for watching matches online for free via digital broadcasters such as PPTV; merchandise coupons for items such as official team jerseys and localised T-shirts; and incentives such as prize draws.
FC Schalke 04 introduced a scheme on football app Dongqiudi in 2017. It is a paid membership available exclusively via Dongqiudi with two levels: premium membership, charged at CNY619 per year, and basic membership at CNY149.
Members at both levels receive a membership card, virtual sticker and icon in the app, along with coupons for discounted merchandise, and an official team jersey for premium members, and official T-shirt with basic membership.
The Red Card report notes that the digital memberships developed by Arsenal and Manchester City have “proved that offering a membership package tailored for Chinese fans within an existing China ecosystem have higher chances of conversion compared to the traditional global memberships”.
More European clubs are set to launch membership schemes soon. Benjamin Wahl, head of China at Borussia Dortmund, revealed that it will launch a membership club in May using a WeChat ‘mini programme’ [an application within the WeChat ecosystem]. It will be the first comprehensive Chinese membership scheme from a European football club to be run solely over WeChat.
The programme, which will be free to join, will complement Dortmund’s fan clubs in Beijing, Shanghai, Guangzhou and Hong Kong.
“Members will have access to exclusive BVB content and will be able to join BVB fan clubs and connect with each other,” Wahl told SportBusiness. “Games, raffles, travel information about Dortmund and merchandise will be included as well.”
Other digital opportunities
Looking at other ways of monetising fan engagement through digital platforms in China, Hornby recommends that clubs seek paid content deals with popular platforms such as video hosting service Youku, short video app Douyin, or news and information platform Toutiao. Both Douyin and Toutiao are owned by the Chinese tech company ByteDance.
Hornby envisages Chinese equivalents to Amazon’s series on Manchester City, All or Nothing, or Netflix’s docuseries Sunderland ‘Til I Die.
He also believes that there will be more partnerships with social media platforms, such as that struck between Real Madrid and Weibo in 2017. The Spanish club provides the platform with an agreed volume of content which it can commercialise through advertising, with the revenue shared with Weibo.
“This is something I think we’ll start to see more of this year, both with Weibo and with the ByteDance platform, both of whom have done deals with the NBA,” says Hornby.
Clubs are also beginning to charge for content through their own applications, with Juventus, for instance, last year adding pay-per-view videos on top of the free content package in its VR app.
Online to offline
Another valuable way for clubs in China to enhance and monetise their fan engagement is through online-to-offline activation.
The club that leads the way in this regard is Manchester United. In January it announced plans to open three “entertainment and experience centres” in China by the end of 2020.
The complexes, scheduled to open in Beijing, Shanghai and Shenyang, will provide live screenings of United matches, and will feature interactive attractions and exhibitions, restaurants, and a club retail store.
Only the largest clubs have a Chinese fanbase that can sustain this kind of endeavour, but Hornby says all European clubs in the Chinese market need a strong online-to-offline connection, regardless of their size.
United’s new fan centres are designed to build on its #ILOVEUNITED events, which are held across the world, including in China, where they take place twice each year. As well as a live match screening, they feature pre- and post-match analysis from former players, and sponsor activation through live entertainment, giveaways and competitions.
#ILU Beijing, held in 2018, was attended by 1,100 fans, and had a social media reach of 10.7 million, coverage from more than 60 media networks and 118 partner activations, according to the Red Card report.
The Red Card report says offline events allow clubs to directly engage with Chinese fans, while “digital amplification plays a crucial role in opening the event up to the rest of the country who are not able to attend.”