This is Part 3 in a three part series on the awesome success of David Stern and the NBA in China. Parts 1 and 2 are here and here.
“By 2004-2005, the NBA China plus Yao Ming had begun to occupy a unique media position between the US and China. Western brands discovered they could reach millions of Chinese through the NBA. Similarly, Chinese companies seeking to go global found they could advertise at NBA games and reach both Western and Chinese audiences at the same time. And even domestically focused Chinese companies found that they could reach Chinese consumers by advertising at games in the US. For example, Yanjing Beer began buying courtside advertising at NBA games in Houston, even though their products were not being sold in the USA. The NBA became almost an entirely unique US-China advertising platform.
Lots of big companies became deeply invested in the success of the NBA in China. For example, the 2004 China Games exhibition tour was sponsored by Coca-Cola, Anheuser-Busch, Nike, Disney and McDonald’s. They sponsored the tour and advertised at the games. But they also supported the NBA at their own China businesses. Customers at Chinese McDonald’s outlets received NBA posters with their meals. Nike provided uniforms to the China High School Basketball League. And Coca-Cola hosted an NBA Jam Tour with basketball clinics and parties with NBA stars. Virtually everyone was pushing for the NBA China to be successful. Yao Ming commented at the time, “We can use the NBA to promote the China market . . . The [sponsors] are helping me and I am helping them. It’s mutually beneficial.”
The list of Chinese sponsors for the NBA has since grown and many of China’s largest companies, including Tencent, Lenovo, Peak, Dongfeng, and Haier, now align themselves with the NBA. This continues to fuel their unique cross-border position.
These strategic moves have effectively eliminated the competition for the NBA in China. Replicating what they have done – dedicated viewership by enthusiastic Chinese consumers, the world’s only basketball league, a unique US-China media platform – is probably now impossible.
On February 1, 2014, David Stern stepped down as commissioner, exactly 30 years to the day after he began. He was the longest-serving commissioner in NBA history. And during his tenure, he increased revenue over 30-fold, launched seven new franchises and turned the league into a global phenomenon. Today, the NBA has 12 offices outside the US and its games are seen in 215 countries. And to answer our initial question, he is the person who got a billion Chinese to care about basketball.
Final Point: You Can Win It All In State Capitalism
The NBA in China is an impressive story and highlights an important point: You can win it all in China. You can have a private monopoly in State capitalism. And then you just sit back and enjoy as Chinese consumers become wealthier and wealthier. But your business had better be a world-class proposition.
Looking back, many of the things that made the NBA so successful in China have now changed. Dominant State media channels have given way to online streaming and content available virtually everywhere. CCTV, in particular, is losing influence as more Chinese watch online.
The NBA has gone online and is doubling down on its mass-diffusion China strategy. In January 2015, they announced a new exclusive digital partnership with fellow Winner Take All company Tencent. Through its various portals (QQ.com, QQ, Qzone, Weixin, etc.), Tencent reaches hundreds of millions of Chinese PC and mobile phone users on a daily basis. This new partnership with the NBA will live-stream NBA games (including All-Star Games, Playoffs and Finals) through most of Tencent’s channels. The NBA also has a partnership with Tencent to deliver the official NBA 2K mobile game. As of 2014, NBA 2K Online had 19M registered accounts and is the #1 PC online sports game in China.
The days of Chinese consumers not having access to much content are long gone. It is now a free-for-all for Chinese eyeballs, particularly the online and big-spending younger consumers. For the NBA, nailing this new digital environment will be as crucial as the TV strategy of the last decades.”
A US Marine and local Chinese playing basketball in Tianjin in 1927
(Photo by USMC Archives, Creative Commons License with commercial use. Link here.)
The above excerpt is from my book The One Hour China Consumer Book. I think it is the best thing I have written. Available here.
Parts 1 and 2 are here and here.
Thanks for reading, jeff
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I write, speak and consult about how to win (and not lose) in digital strategy and transformation.
I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.
My book series Moats and Marathons is one-of-a-kind framework for building and measuring competitive advantages in digital businesses.
Note: This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.
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