Beijing and Shanghai marathons' dropping of Japanese sponsors just another round of jingoistic drum-beating

Weekend news in Mainland China and Hong Kong reported that the Beijing and Shanghai marathons were getting rid of the Japanese brands' sponsorships, as well as banning Japanese runners from registering for the Biejing event due to the long-running dispute over the Diaoyu/Senkaku Islands.

The Beijing marathon is scheduled for Sunday, 25 November, and the Shanghai Marathon is scheduled for 2 December.

Seiko has been one of the sponsors for the Beijing Marathon, while Canon was the main sponsor of Beijing Marathon 2011. Toray used to be the title sponsor of the Shanghai Marathon until they were kicked out in September, along with other sub-sponsors such as Uniqlo and Japan Airlines.

Meanwhile, the Beijing Marathon organisers also tried to block Japanese runners from registering for the race on their website. A statement from the organisers said the move was "in consideration of the safety of the runners". 

Marc van der Chijs, a Dutch businessman living in Shanghai and a keen marathon runner who will also take part in the Shanghai marathon this year, told Campaign Asia-Pacific that it looks like the organisers reversed the ban on Japanese runners after the commotion in the press. "Officially it was because not many Japanese individuals sign up, but two days ago, the reason given was to protect Japanese participants—a strange story," he said.

A MD at a US agency in Shanghai said the decision was appropriate given the tension between the two countries at the moment. “Having Japanese brands sponsoring these types of events may be viewed as disrespectful of the Chinese and more importantly, it is likely to create another wave of anti-Japanese actions.”

The MD, who preferred to be unnamed, said Japanese brands will suffer if anti-Japanese sentiment continues in China. "For most Japanese brands, China is their biggest market in the world. For many industries, they have already suffered an over 30 per cent loss in market share, year-on-year." 

Citing the automobile industry as an example, US, Korean, German as well as China home-grown brands recorded double digits increase in sales over the past few months, at the expense of Japanese brands. "I anticipate the situation may continue in the next few months. It will take very long for Japanese brands to recover the loss in the China market, not only from a financial standpoint, but also from a branding perspective.”

However, she pointed out that most riots in China have taken place in second- and  third-tier cities. "It seldom happens in first-tier cities, and even if it does, the scale is much smaller and citizens are more civilised and understanding." 

Peter Mack, executive director of marketing for Greater China at Landor Associates, said: "My reaction to this news is a qualified shrug of the shoulders. On the one hand, nationalism, both positive and negative, has always been a factor in consumer buying behaviour and a mode of making a political statement, not just in China but all around the world." 

Mack said the Chinese have boycotted Japanese goods numerous time before, but Japan has more to lose from even a temporary reduction in trade between the two countries, which seems to be happening according to data from the past two months. 

He pointed out that Japan's exports to China are a larger percentage of its overall exports than China's to Japan. "Japan is in an economically weak period right now. This problem just makes it worse, as the dispute is not going to go away of its own accord, like some in the past," he said.

"I believe that at this point Japan has to be pro-active in finding policies that will defuse the issue in a meaningful way and neutralise ultra-nationalists on both sides."

An anonymous executive in a Japanese agency in Shanghai told Campaign Asia-Pacific that anti-Japanese sentiment in China surges every two to five years and Japanese brands know how to deal with it.

He said consumer appetites have not changed that much. "We believe consumers have strong demand for Japanese brands as a reliable option." However, he adds that automakers have reported sales declines of 10 to 40 per cent in September and October. This points to consumers avoiding visibly Japanese products like cars.

He said, however, that Toyota's decision to compensate people whose cars were damaged during recent protests was seen by Chinese consumer as being the actions of a very responsible brand. 

Another Hong Kong-based regional business director of an international branding agency said the best way to deal with such crises is to be honest and steer away from politics and concentrate on the values of the brand. He said affected companies should explain that, "Yes, we are a Japanese company, but our brand values are that we make good TVs; we are not involved in politics. Just be honest."

How should agencies in China with Japanese clients deal with the situation?

Mack suggested that it is the duty of an agency to be able to interpret the consumer mood on behalf of the client, but also to take the long view, by helping the client understand how the situation will evolve. For example, it would not be a great time to launch a whole new campaign for a Japanese brand in China at the moment, but that does not mean the situation will be more favorable in six months' time.

He stressed that this does not mean that foreign brands have to kowtow to the Chinese government in order to do business in China any more than they have always had to, and any more than they have to in many countries.

Brands are part of, not separate from global real-politics. Whether you are an American, French, Japanese or Chinese brand, you will be judged in part based on how the consumer feels about your country of origin. 

However, he said foreign brands should kowtow to Chinese consumers and recognise their sentiments, because consumers have more choice than ever before, among both foreign and domestic products.  So it might make sense for Japanese brand owners to encourage their government to find some common ground with China.

Mack added: "To be honest, if we are talking about kowtowing, I am less concerned with the boycott of Japanese goods (which I interpret as a nationalist-led movement with the tacit, but passive support of the government) than I am with the embargo of Google and the New York Times by the Chinese government. That I do consider strong-arm tactics."

The anonymous executive in a Japanese agency in Shanghai pointed out that this year had also seen anti-Philippines sentiment in China. However, the biggest learning for Japanese brands can be taken from the trade conflict between Japan and the US in the 1980s. "Japanese brands had learned how to respond to this kind of cultural conflict, but also Japanese agencies believe we can help Chinese brands that may face similar conflicts in the US or elsewhere in the near future."

Indeed, this anti-foreign-goods sentiment linked to nationalism is not unique to China—Americans boycotted French goods because France objected to the Second Iraq War, Vietnamese Americans and Filipino-Americans are boycotting Chinese goods because of the Spratly Islands dispute, the French are boycotting California's wines because of its anti-foie-gras laws, while Greeks are boycotting German and Dutch goods to protest the austerity measures forced upon them by the EU—the list goes on and on.