"We are encouraging small to medium sized enterprises (SMEs) to jump onto the bandwagon and participate in the Olympics because we are not simply promoting certain larger enterprises alone to do business," Wei Jizhong, former Vice Chairman of the Chinese Olympic Committee, told a reporter from Xiaokang magazine recently.
"The Olympics is not only for big enterprises, but also for those who have the ability," a CEO of a medium-sized enterprise said.
The 2008 Beijing Olympics provides an arena for enterprises at home and abroad to compete with each other. Experts predict that with the upcoming Beijing Olympics, 80 percent of Chinese enterprises will try to promote their sales by connecting into the Olympics.
Most Chinese enterprises are small and medium-sized, now numbering some 10 million throughout the country, 300,000 of which are located in Beijing. As the Olympic program progresses, not only business giants, but also these SMEs are starting to embrace the "Olympic Spring."
Franchises: the early bird catches the worm
According to past experience with other Olympics, 70-80 percent of Olympic products are sold before and during an Olympic year. In China many Olympic franchised stores opened in 2007. Although profits are higher during this period, the competition is also fierce. Small and medium-sized enterprises are urged to get involved as early as possible.
"Even though the Olympics is a vast project, it consists of many details. It's like a limousine; although SMEs can't act as manufacturers, they can make their own contributions to the car by providing various parts," Huang Wei, Beijing Olympics' senior consultant on economy said. "SMEs can do a lot regarding Olympic details.
"They are more flexible compared to bigger ones. They can grab new opportunities and develop new products. It's relatively harder for big enterprises to do so.
"Steel bars, cement and coating are needed when constructing stadiums, plus seats and lights are also needed. These are golden opportunities for small and medium-sized enterprises. The Olympics will enhance the development of an industry chain and all the enterprises on this chain can benefit from it," he said.
According to Yuan Bin, Director of the Marketing Department of the Beijing Organizing Committee for 2008 Olympic Games (BOCOG), the BOCOG has successively launched plans for SMEs to act as Olympic suppliers. "Interested enterprises should pay close attention to the BOCOG's policy," Yuan said.
The truth is that the SMEs need government guidance because they are not active enough. According to the rules, only projects worth more than 1 million yuan require public bids. Enterprises should recommend themselves for projects under that amount.
SMEs need to identify their own competitive edges
"The competition for Olympic sponsorship, suppliership and franchiseship is cutthroat. If SMEs fail to squeeze into the ranks of such partnerships, they should not be discouraged," said Du Wei, Vice Director of the Research Association of Beijing Olympic Economy. "Don't accept it for granted that only big companies have the opportunities to benefit from the Olympic Games. Instead, SMEs should identify their own competitive edges in order to get a piece of the Olympic pie."
Du pinpointed Olympic venues as one of the opportunities SMEs could tap into.
"Miniatures of Olympic venues were well received during the Barcelona Olympic Games in 1992," he commented.
There are altogether 32 competition venues, 43 independent competition venues, and 13 non-competition venues for the 2008 Beijing Games.
"Products related to Olympic venues are also symbols of the Olympic Games even when they are not carrying the Olympic logo," said Du, suggesting SMEs to seek timely product demand information from Olympic venues in Beijing and six other partner cities."
Du also pointed out three peak phases for booming Olympic business opportunities.
The first phase is the half-year before the hosting of the Games. A large number of overseas tourists will come to Beijing to visit Olympic venues and tour around China. The second phase consists of a one month period: 16 days for the Olympic Games and 16 days for the ensuing Para-Olympics. During this month, Beijing expects an influx of 300,000 tourists from overseas and other parts of China. The third phase is the period of one year after the Games have concluded. During this period, tourists are expected to reach 8 million alone in Beijing, compared with the current 3.6 million. Apart from Olympic venues, these tourists will also visit other parts of Beijing and China.
Novel gifts and souvenirs are another niche market small business owners might fit into, Du said. "Souvenirs with national features are always popular with tourists. Just as Italy's famed fashion leather handbags, Chinese knitted bags and fabric bags which have distinctive national features are also eye-catching."
Business opportunities derived from Olympic marketing
According to Jiang Weihua, an Olympic marketing expert, in the final year of the Olympic marketing, Olympic sponsors of the 2008 Games will launch a decisive marketing campaign. Nearly a trillion yuan will be used for sponsors' marketing strategy in this year, generating huge business opportunities for SMEs in some industries such as advertising, gift manufacturing and the media. In addition industries originating from Olympic marketing will also be an emerging source of profits for small businesses.
"Olympic marketing is a systematic project. Ample capital and top-notch products and services are both necessary," said Jiang.
Olympic sponsors usually occupy the most competitive resources in their respective industries; however, there are still some gaps SMEs can fill with cutting-edge products and services," he explained.
"For example, China Mobile is one of the 2008 Olympic sponsors. SMEs can use their own resources to provide high-quality 3G-related products and services to match China Mobile's marketing demands. Through successful matching, SMEs may also distinguish themselves and gain a place of their own in the capital market."
(China.org.cn by Li Xiaohua and Yuan Fang, November 19, 2007)
