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Why Esports Are A Golden Opportunity For China's Beer Brands To Get Millennials Drinking Again

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Sports, beers, and bros is one of marketing and advertisement’s most tired, most gendered and most trusted consumer archetypes.

The trope is familiar and successful in the United States – where it echoed through decades of advertisement, sponsorship and engagement with one of marketing’s most aloof demographics: 18-29 year old men. Today's rendition responds to apparently fitness-crazed millennials. The ads have contorted into more health-oriented re-branding, where beer might as well now be a sports drink.

As in the United States, sports in China have long sold beer. But with China's millennial men, the NBA and English Premier League are now the two most watched sports leagues, and Chinese beer brands are struggling for relevance in a fragmented market.

Harbin, China's oldest beer brand, achieved this elusive engagement through competitive video gaming, otherwise known as esports. Rather than re-branding their beer, the brand adapted to a novel, and profitable, definition of sport.

In 2016, marketing for esports was worth $280 million in video, influencer marketing and sponsorship, and is predicted to hit above $1 billion by 2021.

China’s oldest beer maker, Harbin, has already jumped into the market for esports, which by 2024 may even be an Olympic sport.

Anhueser-Busch Inbev, which owns the Harbin brand since 2004, found in a 2015 passion point study that 18-29 year-old Chinese men responded more positively to esports than to the traditional hot spots: foods, sports and music. The finding, according to an interview with senior marketing director Joseph Lee, was a surprise. So the company was at first hesitant.

Testing the water, Anhueser-Busch InBev sponsored a one-hour live stream with product giveaways and received an overwhelmingly positive response.

A Flat Market

China has always met beer brands with a distinct set of hurdles.

There are no account-based sales structures, where brand reps push product to meet demand in local markets. Instead, beer distribution is store-by-store. And the market is declining: in 2016 by 4%.

While craft brewing appeared to buoy the market from 2010 to 2015, that bubble fizzled last year. BMI Research predicts the industry will continue to decline for the next five years.

Japanese brewer Asahi is looking to exit the market, selling its stake in the Tsingtao brand. The four largest brands – CR Snow, Tsingtao Brewery, Anhueser-Busch InBev, and Beijing Yanjing Brewery – control less than 60% of the market.

Anhueser-Busch Inbev, only represents 11.2% of the fragmented market and now purports to only focus on the younger generation.

Esports: Virtually Everywhere

Since 2016, Harbin has sponsored esports teams, run advertisements and events, live-streamed competitions, and created the Harbin Beer Esports Legion, its own esports competition slotted as a run-up to the 7th International Dota 2 Championships in Seattle.

Held in Shanghai in June 2017 as a campaign with Starcom and Publicis Media Content, the brand ran a competition for teams that play Dota 2, one of the big four esports games, which counts over 13 million unique monthly players. At the Seattle championships in August 2017, Harbin ran a live-reporting platform and sponsored Chinese teams.

Through 2016, 57% of all esports content was viewed in China: 11.1 billion video streams in China, compared to 2.7 billion in the United States. Few international brands are active in China’s esports sector: BMW, Red Bull, and Sprite are among the ones that are.

Esports gamers and fans present a dedicated market, as the platform is distinctly interactive. People access games or live streams actively and frequently, often from mobile phones throughout the day. Esports is a major catalyst of the convergence of mobile and brick-and-mortar sales platforms.

With esports reaching the mainstream in the United States as well as China, beer brands may soon leave the gym, and return to the comfort of the couch-bound consumer.