Sports marketing boosts Chinese brand in US

ZTE USA celebrates the Chinese New Year with the Cleveland Cavaliers at their home game at Quicken Loans Arena in early February. (People's Daily Online/Han Shasha)

San Francisco, Feb.17, (People's Daily Online) -- According to Rhodium, global cross border M&A reached a six-year high in 2015, with around $1 trillion worth of completed deals. China has transited from big buyer in extractive sectors to a more mature player across the full spectrum of industries.

With more and more Chinese companies going global, how to effectively take local market share is imperative. Localization is always told a key to success for new comers in an overseas market. And sports marketing is considered as a good way in localizing its brand and promoting its brand awareness.

ZTE is one of these companies that investing heavily on sports sponsorship. In early February, all NBA fans attending the Cavaliers' first Chinese New Year celebration game at Quicken Loans Arena, Cleveland, received a t-shirt printed with Chinese characters presented by ZTE, a smartphone partner of the Cavaliers.

That's not the first time that the fourth largest smartphone supplier in the U.S. sponsored a NBA team. ZTE also sponsored the Houston Rockets, the hometown team of ZTE’s U.S. operations, San Francisco’s Golden State Warriors, New York Knicks and Chicago Bulls.

Lixin Cheng, CEO of ZTE USA, told the reporter that the brand awareness increased from 16% to 34% after the company's partnership with the NBA. ZTE marketing manager said that Houston accounts for 5% of the country's total population while has more than 8.5% ZTE smart phone users. The product sales are over 41% higher than those in other similar cities without sports marketing budgets.

Started in China, the group set it foot in the United States in 1998. Not until in 2007, its U.S. company sold its first cellphone. ZTE has made market share gains in the U.S. over the last few years. And now it currently has about 7.7% of the U.S. market, making it fourth behind Apple, Samsung and LG.

Big carriers did not carry the company's phones on postpaid under their own brands. No name means no direct consumers. It's right to invest in the direct-to-consumer marketing like ZTE’s basketball sponsorships, said an industry expert.

As for why basketball, Cheng said that China has a huge basketball fan base and parent company ZTE has a broader partnership with the league in China. Report shows that more than 300 million Chinese youth play basketball game, which is equal to the size of the entire U.S. population.

China has the world’s largest market of video watchers, totaling 461 million, according to the China Internet Network Information Center. Chinese media and Internet companies are snatching the rights to broadcast games from the Golden Gate Warriors to German soccer-club matches.

If a Chinese company sponsors a NBA team, it gains not only the potential consumers in the United States, but also those watching the game in China. "The Chinese audiences watching the game are more than 100 million, which is almost the same as your Super bowl audiences in America. " said Cheng to Len Komoroski, chief executive officer of the Cleveland Cavaliers.