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Winners in the World Cup kick off

NEWS RELEASE
07 June 2005

Winners in the World Cup kick off 
Major sporting event sets cash registers ringing for sale of products and services 

With the FIFA World Cup around the corner, consumers and sellers alike are in a football frenzy. The experience of past decades points to a marketing and sales bonanza during global sporting events with consumers in the Asia-Pacific region poised to lift sales to record levels. 

“We make some predictions here on products and services that are expected to get a boost in demand from FIFA World Cup 2006 based on historic statistical data on how sports have impacted sales of products and service,” said Leon Perera, Group Managing Director of Spire Research and Consulting.

Digital Display (Television sets) and Digital Media (DVD recorders) sales are expected to skyrocket as consumers clamor for bigger and brighter display devices to catch the action:

The 2006 World Cup is expected to prompt a technology shift in the TV market. The Korea Times announced that makers of large LCD and plasma display panels in South Korea, Japan and Taiwan are all expected to benefit from increased sales. Mainstream products in Korea for this year’s World Cup are 40-inch LCD sets and 50-inch PDP sets.

LG India is looking to sell 200,000 of their 29-inch category and slim section in the Northeast states as a result of its FIFA World Cup sponsorship.

Historical Precedents

When India hosted the Asian Games in 1982, it sparked a huge demand for colour televisions and marked an inflexion point – after which color TV penetration in India rapidly increased.

Television sets and VCR sales soared to record levels in Japan during the 1997 Nagano Winter Olympics.

The sale of digital television sets in South Korea rose sharply just before the World Cup soccer finals in 2002. The Electronic Industry Association of Korea (EIAK) announced that sales rose 60 percent in May from 47,000 sets sold in the preceding month.

Therapy for a mature retail sector
Sports events are often associated with a rise in general merchandise sales, as shoppers are energized by the heightened excitement of the occasion, not to mention increased levels of advertising.

Together with the on-going Great Singapore Sale, FIFA World Cup 2006 will provide a strong boost to the local retail industry. Merchandise sales in Singapore have doubled ahead of the event in Germany, according to Channel NewsAsia. Jerseys are fast flying off the shelves even though the matches have yet to kick off. Other products specially brought in for World Cup 2006, such as customizable “Tune It” footwear, are also selling well.

Historical Precedents:

Sales figures spiked during the 2002 FIFA World Cup in Korea. For the three days following the June 4 match when South Korea beat Poland 2-0, CJ39 Home Shopping reported a daily increase of almost 23 percent in sales. June is usually a low-demand season, but TV home shopping firms were quick to capitalize on World Cup marketing to raise sales. Transactions through vending machines within the country, too, reached a whopping Won 284 billion that year.

Fans tend to flock to sporting goods departments, come their favourite sporting events. CNN reported that World Cup fever boosted the retail of related merchandise in 2002 with football related products surging to a significant 85% increase. Asian sales of Adidas goods, for example, leapt to 539 million euros after the World Cup.

Advertising industry scores
Advertising is perhaps the biggest money-spinner when it comes to sporting events. Riding on the popularity of these games are companies that advertise and sponsor their way into consumers’ hearts.

Historical Precedents:

The India Times reported that advertisers in the national sport of cricket paid as much as S$15,000 for a 10-second spot on television. The Indo-Pak series were expected to generate more than S$45 million in television ads.

Online promotion is well on its way to becoming the future of advertising.The football World Cup will be a significant catalyst to this phenomenon, which presently accounts for nearly 5 percent of all advertising. The proliferation of interactive sports events-related websites in recent times, such as the soccer fan site collaboration between industry giants Nike and Google, will contribute to this upward trend.

3G Usage set to Samba
3G usage is likely to increase significantly during this year’s World Cup. Service providers have rolled out match schedules, live matches, replays, highlights and more, to attract soccer fans towards using its technology. These are spin-offs to mobile technology, which already exists in Korea and Singapore, but whether the promotions will strike gold remains to be seen.

Conclusion
Global sporting events have, in recent decades, been celebrated for their economic value. Certainly, the pitfalls of fans stopping at nothing to catch their matches live include reduced efficiency in the office, lulls in the stock markets and falling sales of entertainment businesses unrelated to sports. However, the army of industries that gain under these circumstances is far greater, and likely to grow in the face of advancing technology.

 

About Spire Research and Consulting
Spire Research and Consulting is Asia’s leading strategic market intelligence consultancy. Spire’s competitive advantage lies in its ability to deliver to its clients actionable intelligence on the external business environment in support of their strategic decision-making in marketing and business development. Spire is one of the few companies in its industry to be headquartered in Asia. Spire’s clients include over 20 Fortune 500 organizations as well as Government agencies in nine countries. For more information, visit us at www.spireresearch.com.

For media enquiries, please contact:
Deborah Lee
Spire Research and Consulting

Phone: (65) 63276131
E-mail: deborah@spireresearch.com

William Chia
Fleishman Hillard

Phone: (65) 64246387
Email: chiaw@fleishman.com

Ronald Wong
Fleishman Hillard e

Phone: (65) 64246386
Email: wongr@fleishman.com

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