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The Grand Prix
circuit in Shanghai.
(Agencies) |
It is a marketing match made in heaven -- the
glamour of Formula One and the mouthwatering potential of China's vast
emerging market coming together in the glitzy eastern city of Shanghai.
When China's financial hub hosts the country's first ever Formula One
event this weekend, many eyes will be focused on the lucrative
merchandising and sponsorship spin-offs.
Since Beijing won the right to hold the 2008 Olympics, China has sought
international recognition as a destination for prestigious, money-spinning
events such as Asian Cup football, Masters Cup tennis and professional
golf tournaments.
The glitz and glamour of Grand Prix, with its estimated global TV
audience of 300 million, is perhaps the biggest commercial draw with its
myriad sponsorship and
merchandising deals for both the host city and Formula One.
"It absolutely encourages the business card for Formula One and
Shanghai, as it is opening up a lot of doors for business and a lot of
different markets for operations within Formula One," Sophia Claughton, a
manager at KHP Consulting, the Shanghai F1 circuit's marketing consultant
said.
Shanghai is selling itself as the gateway to China's increasingly
wealthy 1.3 billion people and the dizzying array of business
opportunities that could entail. Formula One has jumped at the
opportunity.
"Many teams sees this an entry to the rest of China, whether it be for
the drivers, merchandisers or manufacturers," said Claughton.
Over the past year teams have embarked on promotional tours, with
Ferrari most notably inaugurating the Shanghai circuit in June when former
star driver Gerhard Berger demonstrated the awesome ability of Michael
Schumacher's 2003 title-winning car.
Williams BMW driver Ralf Schumacher also blazed through Shanghai
earlier this year, while the team set up a shop selling T-shirts, caps and
model cars in the city's trendiest entertainment spot Xintiandi.
With so much more at stake than crossing the finish line first, Formula
One bosses have hailed Shanghai as the most important race on the 2004
calendar despite Michael Schumacher having already wrapped up a seventh
world title.
"The race in Shanghai will prove to be the most important move of
Formula One in the last few years," Renault boss Flavio Briatore was
quoted as saying by Formula1.com website.
"To enter a new market you need exposure. Now we have the race, now we
have exposure for our sponsors," Briatore said.
As owners of the 5.45 kilometre (3.39 mile) racetrack designed by
German designer Hermann Tilke, the Shanghai government is betting its
multi-million-dollar investment in the headline-grabbing event will pay
off.
China's largest city has spent some 300 million dollars for the right
to host the elite motor sport, transforming a marsh on the western outskirts of Shanghai
into what organisers say is the sport's most state-of-the art circuit.
There have been additional costs for the privilege of being brought
into the elite motor racing fold with a seven-year contract to host
Formula One, with Shanghai officials paying more than 40 million dollars
in various fees.
And here has been lavish spending on city infrastructure, which
includes a subway slated for completion in 2007 and a new network of roads
that lead to the track some 40 kilometres (24 miles) west of downtown.
Mao Xiaohan, the circuit's general manager, estimated that Shanghai should
be able to earn its money back in decade. "According to our
forecast, we can make our investment back in 10 to 12 years,"
he said.
(Agencies) | 
Updated: 2004-09-21 14:24