Building high value partnerships in Europe

Chinese telecoms major looks to boost its brand in overseas markets with football club sponsorships

Huawei Technologies, which has been leading Chinese companies' charge in sponsorship deals with European football clubs, says it believes it is making the right bet.

The Shenzhen-based company has become the premium sponsor, the second-highest level, for four football clubs in Europe: Arsenal FC of England, Borussia Dortmund of Germany, AC Milan of Italy and Paris Saint Germain of France. Most of the deals are for three years. Huawei has also sponsored the Spanish league La Ligua.

"Football is the universal language of Europe," says Ren Hongliang, president of Western Europe Consumer BG of Huawei Device Co Ltd. "Its influence is beyond the boundaries of age, race and nations."

The company's research has found that the cultural differences between different countries in Western Europe are huge, especially in terms of language and consumer preferences, Ren says. Football can be a common voice that speaks across these boundaries.

Huawei's first foray into European football sponsorship was in April 2012, during a Copa del Rey match between Real Madrid and Athletico Madrid. That partnership extended to the 2012 UEFA Super Cup final between Athletico Madrid and Chelsea, a match in which Huawei appeared as the main sponsor of Athletico Madrid.

"We believe football branding is the best way for our further penetration into Western Europe," Ren says.

"Huawei regards Europe as our most important overseas market, whether in the level of consumers, enterprises or service provider operations. We want to become the best partner for our European clients."

Huawei now relies on the overseas market for 65 percent of its revenue, which comes from products and services that include multimedia, mobile and fixed broadband networks, tablet PCs and smartphones. The company announced in January that its global sales revenue for last year would be between 238 billion yuan ($38 billion, 27 billion euros) and 240 billion yuan, 8 percent higher than the year before.

"We want to become the best local partner, not only in the level of service providers but also in the level of consumers. So we need to demonstrate that Huawei is a highly localized brand and deeply merged with local culture."

The football sponsorship deals include exposure on advertising boards during televised matches and being able to participate in the promotions of the clubs through social media.

"Each of those clubs has many followers on social networking sites including Facebook and Twitter," Ren says. "Arsenal, for instance, have more than 20 million followers on Facebook."

Huawei is also allowed to use club logos and players' portraits in promotions and advertising.

"In addition, we get access to stadium VIP seats for matches, and these can be given away as prizes in promotions."

The sponsorships with the European clubs could also help with the company's expansion to other continents.

"The five big leagues have major appeal in language communities across the world. For instance, the Spanish top division has a large fan base in South America, many countries of which are also Spanish-speaking.

"Our main aim is to increase our presence in Europe, and that could help us elsewhere."

Ren recognizes that the sponsorship of European leagues could help the company win recognition among domestic fans, too.

"As for the Chinese market, which is the world's largest, we are happy to increase the influence among them through sponsorships."

Sponsorship of the European clubs can also complement Huawei's many ways of building its brand in Europe, Ren says.

"Right now we need to let more consumers know who Huawei is and what it can do for them."

The company is aiming for brand awareness of at least 80 percent in Europe, he says. The company now has brand awareness of 60 percent in Spain, 53 percent in Germany, 47 percent in Italy and 37 percent in Britain, according to one of its surveys.

Huawei will also seek to increase the interaction with fans through customized products. This month it launched a "Gunner Phone" for Arsenal fans. Based on its new smartphone P7, the phone boasts customized software official club apps and apps that allow fans to interact with the players, Ren says.

In September it announced plans to enter a partnership with Borussia Dortmund to provide the club's stadium with wireless computer networking that will allow, among other things, "exclusive content" to be delivered to fans on mobile devices.

In addition to branding, Ren says, the development of products, building a localized team and expanding distribution channels are key factors for the company's success in Europe.

"As we internationalize, there are two crucial factors: one is brand building and the other is building a strong localized team."

The company has developed strategic ties with three distribution channels in Europe, including telecommunications operators, retailers and e-commerce companies, he says.

Ren says that the company needs to build its reputation among consumers, and that can only be done through its products and services."

(China Daily European Weekly 05/23/2014 page15)