What makes 12 major, international companies collectively put up $1 billion to become official “sponsors” of the Beijing Olympics? Numbers, the sheer numbers, of potential customers.
So says David Rebstein, a professor at the University of Pennsylvania’s Wharton School of Business, in an interview with Yahoo sports.
Even though major consumer spending in China is still a pent-up possibility, the prospects are not lost on foreign firms badly wanting a piece of China’s 1.3 billion buyers.
Rebstein noted that although when he visited India years ago, he was struck by its poverty, he still remembers that maybe 20 percent of its people at that time might be able to afford a car. And given India’s large population, 10 or 20 percent is still larger than the potential buyers in the U.S.
China’s population is even bigger.
Rebstein told Yahoo that one sponsor, General Electric, got hundreds of millions in contracts based on the $80 million sponsorship fee it paid. The firm also picked up lucrative contracts building facilities and improving infrastructure in anticipation of the Games, says Rebstein, who is a GE consultant.
Other corporate sponsors include Coca Cola, Kodak, Johnson & Johnson, Lenovo, McDonald’s, Panasonic, Visa, Atos Origin, Samsun, Omega and Manulife. All are banking that their prominent exposure to more than a billion Chinese will make such a positive impression at the Olympic national pridefest that the Chinese will want to be their loyal customers for years to come.
The problem, of course, is that ambitious companies have to look beyond the many human rights issues confronting China, such as its treatment of Tibet and its censoring of the Internet.
My view is that companies have a real responsibility to balance their bucks against their conscience. There’s lots of opinion out there that by drinking more Cokes, the Chinese will somehow become more benign and democratic. In my opinion and my experience, this argument only goes but so far. What do you think?
