Shoe brands eye Olympic gold
The Beijing Olympics are less than a year away, and one of the hottest races shaping up is not among the athletes but the companies that outfit them.
China is one of the largest emerging markets and a top focus for shoemakers fighting for market share. And as the 2008 Beijing Olympics approach, the intensity is reaching a new high.
"The Beijing 2008 Games are set to be the greatest sporting event in modern Chinese history," said Paul Pi, head of marketing for Adidas in greater China.
Adidas is an official sponsor of the Olympics. In addition to paying a reported $80 million for the sponsorship position, the company has coordinated a marketing blitz that includes opening an average of two stores a day in the country.
The German company has declared the event will help put it in the No. 1 position in China by 2008, a coveted spot now held by shoe giant Nike.
Nike says China is poised to become its second-largest market in the world by 2009 after the U.S. The company has seen tremendous gains there; its first-quarter earnings reported in September show sales in China jumped 50 percent. And Nike executives say the company is widening its lead there.
"The Chinese marketplace is the most exciting marketplace in the world," said Nike Brand President Charlie Denson.
Nike declined to discuss its Olympics marketing plan but says the Olympics is less about advertising than about supporting the athlete.
The company is sponsoring 22 of the 28 competing Chinese federations. And it has one of China's hottest athletes, hurdler Liu Xiang, wearing the swoosh.
Both companies may hit $1 billion annually in sales in China by the Olympics, said Terry Rhoades, managing director of Zou Marketing, a sports consultant company in Shanghai.
In third is Chinese company Li Ning -- a premium local brand but a fraction of the size of its international competitors. Analysts say Li Ning has a different strength, with its base in the smaller and less urban markets, where brands like Adidas and Nike have not spread.
Li Ning, founded by a former Chinese gymnast, has also ramped up its design team and is sponsoring several Chinese teams slated to be strong contenders in the games.
But shoemakers say the race isn't over when the medals are handed out.
Denson says the years following the Olympics may be even more exciting than this growth period.
It's a sentiment shared by both companies.
The games will represent a "real, tangible sea-change in attitudes toward sport in China," Pi said, by spreading a growing trend of interest in athletics and the athletic lifestyle.
Sports were once seen as a luxury in China. But as the middle class has grown and culture has changed, interest has exploded.
Parks and other facilities are being built and opening up to the public. Basketball has become a top sport, and viewers can watch several NBA games a week in China's major cities.
Companies like Nike and Adidas, which have had a presence in the country for decades, have helped spur the growth with sponsorship of teams and tournaments. Nike has made serious community inroads in China, such as investing in Dong Dan Park in Beijing, the equivalent of draping a major city park with a swoosh.
Nike, Adidas and other shoe brands have blanketed key cities in China with stores. Unlike other markets, where shoemakers often see their product sold in retail stores along with other brands, in China the brand-owned store is king.
So shoe companies are offering an inviting format and a stronger brand message that are steps up from traditional Chinese retail stores. Both Nike and Adidas have about 3,000 stores each in China and have aggressive growth plans.
As payoff for the long-term work, a surprising number of Chinese consumers are buying premium brands like Nike and Adidas, despite low incomes and prices several times that of a traditional Chinese shoe. Other brands such as New Balance, Pony and Puma are making inroads as well.
"Puma, Nike, Adidas -- I wear all of them," said Ms. Wang, a 24-year-old who works in advertising in Beijing and would only give her surname. "I really care about the style and design. It's very important, and that's why I like foreign brands more."
International brands have tried to capture the hearts of the youth who are more consumer-driven and connected than preceding generations.
Young urban Chinese, and a growing minority in the countryside, are like their counterparts from Brooklyn to Bangkok: They wear athletic shoes, baggy T-shirts and track suits.
Nike has re-crafted its "Just Do It" campaign for China with innovative short advertisements aimed at the young Chinese consumer and longer pieces such as an innovative film of a Chinese female street basketball player struggling with her wants and the restraints of her parents.
"You can't just sell to them, you have to identify with them," Denson said.
The race for market share in China won't end with the Olympics; it could become even more exciting after the Games are over.
"Can the shoe wars be determined by the Olympics?" Rhoades asked. "No, but it's one more battle."
Shooting for the moon: The new space race
Fifty years ago last month, the Soviet Union launched Sputnik, the first man-made satellite, into orbit at the height of the Cold War and ushered in the space age.
Eyes on the prize: The moon has become the goal for national space aspirations.
Half a century and hundreds of billions of dollars later, the Cold War battle for the cosmos is history but new international rivalries over controlling the final frontier have emerged.
The U.S. plans a manned lunar mission by 2025, but they're not the only country with designs on the moon. After two successful manned-missions into space in 2005, the moon is in China's sights. Japan, the U.S.'s old rivals Russia, and India all have active space programs, with national pride, national security and even commercial gain all at stake.
"There's a mini-space race going on in Asia with Japan, China and even India claiming an interest in sending astronauts to the moon," Bill Read of the Royal Aeronautical Society told CNN.
For NASA , a Chinese "taikonaut" reaching the moon before them would be an embarrassment. In a speech marking the space agency's 50th anniversary on October 1, NASA's Administrator Michael Griffin said that he expected China to get to the moon before the U.S.
"I think when that happens, Americans will not like it. But they will just have to not like it.''
China has a probe poised for a launch to the moon, supposedly before the year's end. The lunar orbiter is to be followed by a lander and then, by 2017, a robotic mission to return moon rocks.
Painting China as NASA's main opponent in a new space race might be designed to secure more funding from the U.S. Congress, but space is a new area of competition between China and the U.S.
"The American's are talking up a space race, the Chinese are not. They're hesitating before being pulled into a very expensive race - they haven't made any public commitment to a manned mission to the moon, but who knows what they're thinking privately?" Pat Norris, Fellow of the Royal Institute of Navigation, told CNN.
The costs of space exploration, manned or otherwise, is incredibly expensive and there has been plenty of international cooperation in space exploration, such as theInternational Space Station. NASA, which estimates it will cost $230 billion to build a lunar base, has invited joint ventures with other countries, but the allure of making a national statement in space remains high.
"There are national rivalries. China sending a man into space was them getting revenge over Japan for being the first Asian country to launch a satellite. It's given the Chinese reason to say they are ahead of Japan in space," says Norris.
Even the U.S.'s old rival Russia is enjoying something of resurgence in space. The enfeebled Russian Federal Space Agency , long under funded during the Soviet-era, has recently had an injection of cash -- securing $12 billion in funding from the government over the next decade, according to reports by the BBC.
Space exploration also fits in with the Russian government's high-profile quest to reassert itself as bold and daring global power. Being able to plant a Russian flag on the moon would give an inter-galactic element to recent demonstrations of Russian international muscle flexing - detonating the "father for all bombs" last month and planting a Russian flag on the sea bed, 14,000 feet underneath the North Pole.
"It really is a national pride thing," says Read. "Currently they launch their satellites and rockets from Kazakhstan, and there's talk of building a new base on Russian soil."
A commercial frontier
As well as national pride there's money to be made. According to a report by the Space Foundation released in 2006, the "space economy" is estimated to be worth about $180 billion, with more than 60 percent of space-related economic activity coming from commercial goods and services.
"Space has always been commercial. Two-thirds of the satellites today are commercial so big money has been made from space technology. Space tourism is a new part of space's business sector that might be small now, but it will grow," says Norris.
Just as private enterprise has transformed the social and economic landscape of Russia since the fall of the Soviet Union, private companies are leading the way to expand into new frontiers and make the most out of their opportunity.
Russian rocket and space vehicle manufacturer Energia build the Soyuz rockets that transport astronauts and cosmonauts and space tourists to the International Space Station.
At a seminar in Moscow earlier this year, its CEO Nikolai Sevastianov stated it would build a space station on the moon in order to mine its potentially abundant mineral reserves. More bold words that are more about marketing than exploration.
"Russia doesn't really have the money to even compete to dominate space. Even the planned partnership with the European Space Agency on a mission to Mars fell through. What Russia is more focused on is private enterprise and is very good at marketing commercial launches," said Read.
Securing space for national security
While the moon and Mars might give a country some international kudos, Earth's orbit is becoming the main battle ground to ensure national security.
"The real national battles, just as it was 50 years ago, are happening in the military sphere with several countries investing in military spy satellites," says Norris.
"Outer space is of strategic concern to a growing number of countries," said Dr. M. Lucy Stojak of the International Space University in a report published last month by the Space Security Index.
"It is indispensable to national and human security, health, education and disaster management. It's in everyone's interest to safeguard the sustainable use of the space environment."
There is also suspicion over weapons programs. The U.S. plan for a missile defense shield and the American rejection in 2005 of UN talks on banning weapons in space, have cause for concern among other nations.
Aside for military satellites the dependence on satellites for many things from ATM's, cell phone networks and personal navigation, means protecting satellites is a huge priority not just for national security, but the global economy.
Although space junk is the most likely cause of a satellite going out of action China allegedly attempted to intercept an old weather satellite using a ballistic missile in January 2007, raising fears of a "space pearl harbor."
"There are conflicting reports of America developing stealth spy satellites, but when both China and the U.S. sit down and figure out how their military are going to operate, they measure themselves against each other and their respective space programs," says John Pike, director of independent international security think-tank, Global Security.org.
A new Beijing rises amid the old
Beijing today is more dazzling than Paris, said Susan Spano in the Los Angeles Times. Just 10 years ago, children would giggle at the sight of an American visitor, and the city itself was a smog-ridden morass of “pollution, xenophobia, strange food, and a host of other unflattering clichés.” A decade later, Beijing has been transformed, both physically and psychologically. Streets are filled with skyscrapers, shopping malls, and flower-bedecked parks, and next August Beijing will play host to the 2008 Summer Olympics. The Chinese government has gone on a $40 billion building spree to turn Beijing today into “a world-class capital.”
My three favorite places to wander are Dongcheng, Chaoyang, and the West End. Dongcheng, on the outskirts of the Forbidden City, is justly famous for its alley-like streets, with some passageways only 2 feet wide. Its three most famous attractions—the Imperial Palace, Meridian Gate, and Hall of Supreme Harmony—are being extensively renovated. The district also contains the National Art Museum of China, notable for its “stunning collection of contemporary Chinese art.” Chaoyang is the “new China,” on the eastern side of the city, home to upscale chain hotels, multinational corporations, several embassies, and the China Philharmonic Orchestra. The neighborhood's newest and most noteworthy edifice is the 755-foot CCTV Tower, designed by Dutch architect Rem Koolhaas. Located in the Central Business District, it “looks more like the Starship Enterprise than an office building.”
The West End is a “high-energy” district that's easy to love. Peking and Tsinghua universities, “the Harvard and Yale of China,” are here. The campus of Peking University “is one of the loveliest places in the capital”—a quiet, scholarly oasis filled with greenery and painted buildings dating to the Ming Dynasty. Another must-see is the Old Summer Palace, “a neglected treasure” built in the 18th century, whose interconnected gardens and pavilions have been called the “Versailles of the East.” In Purple Bamboo Park, a visitor can also join the old folks in their weekend singalongs, “imagining what they had seen in their long lives in China.”
| 