On December 22, 2005, Hengyuanxiang accepted as an official Olympics sponsor, making it the first textile company to carry the five-ring symbol of The Games in the past century.
Asked by reporters why a company known for its woolen jackets and blankets would fight so hard to be accepted as an official Olympics brand, Liu Ruiqi, board chairman of Hengyuanxiang Group, says he hatched the idea in 1995 when an international survey by Interbrand Corp. found that the best known brands among consumers worldwide were: Olympic Games, Red Cross and United Nations International Children’s Emergency Fund. That finding convinced him that The Games were an ideal promotion channel. Explains Liu: “A lot of people suppose Hengyuanxiang’s products have nothing with Olympics Games, but our sponsorship isn’t simply aiming at accelerating sales. We are improving brand value and building consumer knowledge.” Liu says the company is especially keen to use its Olympic connection to fast-lane the brand into international markets. “Since the Olympic Games possess the highest brand value in the world, if an enterprise manages to set up a connection with this brand, they build brand associations as industry leader with social commitment. It helps a lot with the establishment and promotion of a company's brand.”
Still, Hengyuanxiang’s Olympics sponsorship has come at a steep price; the company had to contribute at least US$20 million in sponsorship to the Olympics, in addition to funding promotional campaigns, leaving some analysts to wonder if the expense will pay off. Survey data from the International Olympic Committee have shown that among 144 sponsors of Olympic Games from 1984 to 2004, only 30 percent successfully benefited financially from the sponsorship.
Liu agrees that, in terms of immediate return on investment, the Olympics are a gamble. However, he stresses that the goal is long-term brand building rather than a short-term sales boost. He says the marketing campaign stresses two principles: the integration of Olympic spirit and Hengyuanxiang corporate values, and continued cooperation after 2008. In fact, the company is now contacting the organizing committees for the 2010 Winter Games in Vancouver and the 2012 Games in London to “establish long-term stable relationships and to gain a permanent effect,” says Liu. “We hope Hengyuanxiang will be engaged in all Olympics events in the future.”
But what do woolen clothes and textile products have to do with The Games? Liu acknowledges that Hengyuanxiang products have little connection will Olympics, but he believes two brands share the same spirit, that is, striving for excellence. Athletes struggle to win medals just as Hengyuanxiang pursues the best-quality production. This spirit gives rise to the company's enterprise culture and business approach.
From now through next year, the world will get a chance to see Hengyuanxiang's Olympics strategy in action as the company gears up to serve as an official textile sponsor of the Beijing 2008 Olympiad. In April 2007, the company began producing a hand-knit woolen tapestry depicting each president of the IOC throughout the committee's history. After completion, the set of portraits will be donated to Olympic Museum located in Switzerland, before that they will be displayed in cities around China until spring of 2008. This exhibition promotes the heritage of the Olympics while also effectively promoting Hengyuanxiang.
The company will also capitalize on its position as China's largest producer of household textiles including curtains, carpets, blankets, sheets, towels by providing for the 2400 rooms of Beijing's Olympic Village. Hengyuanxiang will also supply uniforms for the city's Olympics Organizing Committee and other officials.
One of the most significant efforts of the company will be to outfit the Chinese delegation at the Opening and Closing ceremonies with official “national dress” costumes representing the Chinese nation.
To prepare for this high profile assignment, the company has launched an apparel design competition that attracted famous domestic and international designers from home and abroad. The winning design, to be chosen in December, must showcase “modern wisdom, future concepts, and Chinese characteristics” says the competition committee. The event promises to be a media magnet and has already attracted debate among broadcast and print media.
Liu sums up his investment in the Olympics as a “golden opportunity” for the company’s textile brands to launch in the international market. The company is now researching the best method of incorporating traditional Chinese aesthetic elements into its products in order to distinguish its products overseas. Says Liu: “We long to gain a major position in the global market for the long term rather just temporarily.”
Asked by reporters why a company known for its woolen jackets and blankets would fight so hard to be accepted as an official Olympics brand, Liu Ruiqi, board chairman of Hengyuanxiang Group, says he hatched the idea in 1995 when an international survey by Interbrand Corp. found that the best known brands among consumers worldwide were: Olympic Games, Red Cross and United Nations International Children’s Emergency Fund. That finding convinced him that The Games were an ideal promotion channel. Explains Liu: “A lot of people suppose Hengyuanxiang’s products have nothing with Olympics Games, but our sponsorship isn’t simply aiming at accelerating sales. We are improving brand value and building consumer knowledge.” Liu says the company is especially keen to use its Olympic connection to fast-lane the brand into international markets. “Since the Olympic Games possess the highest brand value in the world, if an enterprise manages to set up a connection with this brand, they build brand associations as industry leader with social commitment. It helps a lot with the establishment and promotion of a company's brand.”
Still, Hengyuanxiang’s Olympics sponsorship has come at a steep price; the company had to contribute at least US$20 million in sponsorship to the Olympics, in addition to funding promotional campaigns, leaving some analysts to wonder if the expense will pay off. Survey data from the International Olympic Committee have shown that among 144 sponsors of Olympic Games from 1984 to 2004, only 30 percent successfully benefited financially from the sponsorship.
Liu agrees that, in terms of immediate return on investment, the Olympics are a gamble. However, he stresses that the goal is long-term brand building rather than a short-term sales boost. He says the marketing campaign stresses two principles: the integration of Olympic spirit and Hengyuanxiang corporate values, and continued cooperation after 2008. In fact, the company is now contacting the organizing committees for the 2010 Winter Games in Vancouver and the 2012 Games in London to “establish long-term stable relationships and to gain a permanent effect,” says Liu. “We hope Hengyuanxiang will be engaged in all Olympics events in the future.”
But what do woolen clothes and textile products have to do with The Games? Liu acknowledges that Hengyuanxiang products have little connection will Olympics, but he believes two brands share the same spirit, that is, striving for excellence. Athletes struggle to win medals just as Hengyuanxiang pursues the best-quality production. This spirit gives rise to the company's enterprise culture and business approach.
From now through next year, the world will get a chance to see Hengyuanxiang's Olympics strategy in action as the company gears up to serve as an official textile sponsor of the Beijing 2008 Olympiad. In April 2007, the company began producing a hand-knit woolen tapestry depicting each president of the IOC throughout the committee's history. After completion, the set of portraits will be donated to Olympic Museum located in Switzerland, before that they will be displayed in cities around China until spring of 2008. This exhibition promotes the heritage of the Olympics while also effectively promoting Hengyuanxiang.
The company will also capitalize on its position as China's largest producer of household textiles including curtains, carpets, blankets, sheets, towels by providing for the 2400 rooms of Beijing's Olympic Village. Hengyuanxiang will also supply uniforms for the city's Olympics Organizing Committee and other officials.
One of the most significant efforts of the company will be to outfit the Chinese delegation at the Opening and Closing ceremonies with official “national dress” costumes representing the Chinese nation.
To prepare for this high profile assignment, the company has launched an apparel design competition that attracted famous domestic and international designers from home and abroad. The winning design, to be chosen in December, must showcase “modern wisdom, future concepts, and Chinese characteristics” says the competition committee. The event promises to be a media magnet and has already attracted debate among broadcast and print media.
Liu sums up his investment in the Olympics as a “golden opportunity” for the company’s textile brands to launch in the international market. The company is now researching the best method of incorporating traditional Chinese aesthetic elements into its products in order to distinguish its products overseas. Says Liu: “We long to gain a major position in the global market for the long term rather just temporarily.”
