Sponsorship news, activation…where’s the action?

A little hole for Hopman
Korean car maker Hyundai has ended its long-running sponsorship of the Hopman Cup less than six months before the 2015 edition of the tennis tournament. Hyundai began its association when it launched in Perth 26 years ago, becoming the title sponsor in 1998.  The West Australian  suggests that Hyundai’s backing was worth $800,000 annually and also included the provision of a fleet of 30 cars to transport players, tournament officials and VIPs. Explaining the end of the deal, a Hyundai spokesman stated "this decision was taken largely as a result of Hyundai's alignment with its global sponsorship portfolio, which primarily focuses on football, and also the strategic fit with our company's sister brand Kia – sponsor of the Australian Open.”
Hyundai’s sponsorships have been mostly towards football in recent years, including the recent FIFA World Cup in Brazil and the A-League's naming partner.  Will the WA government need to step in for a time?  Tourism WA is already a sponsor, having just signed up for further three years.

Samsung extends its commitment … as Olympics top sponsor to 2020. South Korea's Samsung has extended its top sponsorship contract as an Olympics worldwide partner to 2020. This follows Bridgestone signing up in June and Atos and Panasonic dealing into the ‘game’ in February.  The IOC has a full roster now for some years.

The Tour de France’s most recent foreign start in Yorkshire, England, has again shown that hosting stages of one of cycling’s Grand Tours is big business for both the hosts and the organisers, with Yorkshire paying a multi-million-pound sum to stage the race start. The expected economic return of four times the amount invested in the event looks to have been well-achieved.

Sportswear giant Adidas is set to spend at least US$136 million more on marketing after issuing a profit warning last week.
Deloitte has signed up to become third top-tier sponsor for 2015 South East Asian Games, to be held in Singapore – principally at the new Sports Hub. Deloitte sits alongside Fairprice and Singtel. Atos will be the systems integrator.

Bank of America of the US has enhanced its long-standing association with the Special Olympics multi-sport event ahead of its 2015 World Games in Los Angeles. The Bank of America Charitable Foundation will provide US$5m to support LA2015. Bank of America joins Coca-Cola, Deloitte, Mattel and Toyota as an official partner of the sports-and-humanitarian event. The World Games will take place in Los Angeles from 25 July to 2 August, 2015.

And you’ve got to love this ‘cerebral’ connection….Procter & Gamble’s shampoo brand Head & Shoulders has become a global partner of some of the world’s top international basketball competitions. Thanks to a new deal with world basketball’s governing body FIBA, Head & Shoulders will support the upcoming FIBA Basketball World Cup in Spain as well as next year’s World Championship for Women in Turkey and EuroBasket 2015.The deal also includes FIBA’s new 3×3 discipline. From next year, the brand will organise an annual Head & Shoulders 3×3 tour in a number of countries around the world, with the winner granted a place in FIBA’s 3×3 World Tour. Head & Shoulders becomes one of eight global partners supporting this year’s FIBA Basketball World Cup, alongside Champion, Peak, Bwin, Intersport, Molten, Tissot and Visit Spain. For sure the campaign will stretch to Australia.

China and luxury: Excerpt from the EIU's 2014 report on Chinese Luxury
China’s appetite for luxury remains strong. The Fortune Character Institute put luxury spending by Chinese shoppers at US$102bn last year, accounting for nearly one-half of its global market estimates. Equally, the overall
retail market is still seeing double-digit sales growth, despite slowing growth. The 11.8% year-on-year growth reported for February undershot expectations, but remains the envy of most other markets. China accounts for the world’s highest volume of international travellers and the highest per capita spending abroad. In 2012 the
Chinese spent over US$100bn overseas (of which 65% was on shopping). This means that brand houses who have invested heavily in serving Chinese consumers in their existing European and American markets have reaped rewards without the exposure of mass mainland store openings. We expect the number of households in China with income of over US$150,000 to rise from 384,000 in 2014 to 10.3m by 2030. The number of aspirational
middle-class households will also grow rapidly, giving luxury a mass market in China. Over one-third of Chinese households will have income exceeding US$50,000 by 2030, compared with around 1% of households currently. This will effectively create a middle and higher income market larger than the entire population of the US. Crucially, these estimates also exclude grey income, which accounts for a large proportion of spending power in higher income bands.

Eric Winton

Director, New Millennium Business

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