HK firm may win as soccer body seeks new partners
Putting all your eggs in one basket is not always wise, as Fifa found after its sole master product licensee for 2010's World Cup went belly up.
The world soccer federation has learnt its lesson and is now adopting a more defensive strategy in its search for partners to market its merchandise for the 2014 World Cup.
A Hong Kong firm may be one of the early beneficiaries of the new tack, after Singapore-based Global Brands Group went bankrupt in late 2010, leaving behind a sea of broken contracts.
Fifa decided to resume more control of its merchandising business and will work directly with manufacturers and retailers to tap the multibillion-dollar market in World Cup-related memorabilia.
'Fifa suffered substantial financial damage due to the bankruptcy,' Ralph Straus, Fifa's head of strategy and brand management, told the South China Morning Post. 'But we have learnt from that and revised our strategic direction for 2014 and beyond.'
The body's annual reports show Fifa's revenue from selling licensing rights fell by more than half to US$26.1 million in 2010 from US$57.21 million in 2006. Last year it further dwindled to US$12.48 million.
'For key product categories and key markets, we will manage the projects ourselves and directly engage with retailers and manufacturers,' Straus said. 'For the more complex markets, where we have no scope and skills, we would prefer to work with agents.'
The Trade Development Council organised a business-matching session last week in the hope that some Hong Kong companies could grab a bite of the multibillion-dollar market.
Promotional Partners Worldwide (PPW), a Hong Kong-based licensing agent that distributes products such as those based on characters from the Angry Birds game and the Thomas & Friends television series, hopes to represent Fifa on the mainland.
'It is difficult to open retail stores on the mainland these days, and we have our own chain of retail shops, restaurants, factory and supply chain there,' PPW president Ivan Chan said.
But Straus said they are unlikely to work with a single master licensee for China or Asia.
'There will not be exclusivity with agents. For particular territories like Indonesia and Thailand, we potentially will work with different agents,' he said.
'For manufacturers with distribution channels and outlets, we will engage with them directly, but for those without, we will work with agencies.'
Fifa also plans to explore online retailing in the mainland market.
'It is a great platform for testing products and engaging with customers, and it's easier to build a loyalty programme there,' Straus said.
He said Fifa was in touch with mainland internet giant Tencent over possible co-operation.
The value of Fifa's global licensing programmes was estimated at about US$1.52 billion in 2006. Straus said there was certainly a growing interest in soccer on the mainland and that Fifa was planning to hold more events there, which would help boost sales of related merchandise.
'We are looking into organising [an official Fifa Fans Fest] in China,' Straus said. 'Whether it should be held in Beijing or Shanghai or both we are still evaluating.'
The festival is a huge event where soccer fans gather to view important matches: 18 million people took part in Germany's Fifa Fan Fest in 2006.