Tuesday, 1 November 2011

Business lessons from the Indian Grand Prix

Major sporting events are no longer just about who won the match or who won the medals. Who hosted the event — “Formula 1 in India? You must be joking!” — can have a major impact on that nation’s image worldwide.

And when India did host Formula 1, on October 30 this year, that nation’s status was instantly ratcheted up several notches — globally.

This is yet another example of how emerging economies are increasingly bidding for major, prestigious global events.

Since the great success of the 2008 Beijing Olympics, mega sporting events have been travelling to new destinations, particularly to the world’s fastest growing economies of Brazil, Russia, India, China and South Africa (BRICS).(See table below)

From a public relations perspective, the lure of large and spectacular sporting events is often seen as an opportunity to also attract tourism and new investment. The sporting event becomes a platform on which to showcase the culture of the host nation. But the whole event becomes even more than that: it highlights the country’s arrival on the world stage.

The Formula 1 race in New Delhi generated huge international media attention, not just because of the global popularity of the sport, but because the arrival in India of the most expensive sport in the world also signalled that India had now come of age.

For global brands this was a wake-up call: India (and China too) has a growing middle-class with disposable income and they want to buy your goods, so tell them what you have to offer.

The success of the F1 race (against the background of shoddy preparations for the Commonwealth Games) offers instant PR and marketing lessons for foreign firms who want to break into India. Unlike the public sector — that handled the Commonwealth Games —private ventures in that country can indeed deliver world class standards. This flare of the private sector is further underlined by the active involvement of various Indian conglomerates in mergers and acquisitions overseas.

In terms of market demography the young Indian middle-class consumer is trendy, well-informed (due to a free media), cosmopolitan, and exceptionally open to global ideas and cultures (the first F1 race had around 120,000 spectators). It is a country where aligning brand with any truly global event really works.

It could be just a matter of time before there is massive hysteria and a major fan following for the Formula 1 teams, as already exists for the Indian Premier League cricket teams. India might even become the world’s largest market for F1 merchandise.

Marketing gurus should look behind all those depressing figures for literacy, poverty and poor infrastructure: India with its vast young population offers enormous opportunities. The nation of 1.2billion is likely to become the world’s third largest economy by 2030, if not before. However, to get a good slice of that pie, it’s important to get into the market right now — not the day after tomorrow. 

Mega sporting events in emerging nations
2008 Olympics
2010 FiFa World Cup
South Africa
2010 Commonwealth Games
New Delhi
2014 Fifa World Cup
2018 Fifa World Cup