#360business: Neymar growing into football's biggest brand

Andy Lewis 15/06/2015
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Nike ambassador: Neymar Jr.

When Neymar stroked home the clinching goal in the 2015 Champions League final, he did so wearing a swoosh on his Barcelona shirt and with the help of the brand new Nike Hypervenom II boots on his feet. Such facts exist as a rudimentary method for the American sportswear giant to quantify the bang they get for their buck, and with Neymar the returns are already stacking up.

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The Brazilian is not just a member of the exclusive club of ‘Nike athletes’, he is quickly becoming the poster boy of their football division. For now Cristiano Ronaldo remains intact as Nike’s leading man, but at precisely seven years his junior (the two share a birthday), Neymar is very much his heir apparent.

Indeed, to be in Berlin over the weekend of Barca’s treble-clinching 3-1 victory over Juventus was to be in the grip of Neymar’s burgeoning ubiquity. In the heart of the German capital he hovered above the thronging Europaplatz, an almost unfeasibly vast billboard depicting the footballing wunderkind and his gleaming new boots.

It’s a level of exposure he has long been earmarked for by Nike. Neymar signed his first sponsorship deal with the Oregon firm in 2009, aged just 17, after a breakthrough season with Santos. Two years later, by then a fully-fledged international and widely regarded as the brightest young talent in world football, he signed an astonishing 11-year multi-million dollar renewal which will run up until 2022.

Signing the world’s top athletic talent is seminal to Nike’s model and Neymar was viewed as a blue chip investment. Four years into that new contract and he has already sealed a blockbuster move to the Nou Camp, won virtually every title club football can offer and been the face of the 2014 World Cup in his homeland.

He turned 23 on February 5. Neymar is already a global icon and Nike know they have potentially the most marketable player in the game on their books.

“Personally, I think what we have seen so far is just the tip of the iceberg for him,” explained Max Blau, Nike’s vice president of football footwear. “I think this is just the beginning and we are all looking forward to working with him more in the years ahead. 

“He is so young, if you think about it, yet he has moved to Barcelona from Santos and is already playing in the Champions League final on the back of an incredible season.

“And from that standpoint, yes he is extremely young, but he is also very rich in terms of experience with everything he has done so far – coming from Brazil, playing in the World Cup and now with Barcelona – so there are already many achievements and it is a privilege to work with him and get our ideas and inspiration from him.

Neymar's Hypervenoms.

“He is an extremely marketable individual and is also very inspiring to our designers. We are going to start talking a lot more about who he is as a player (in the future).”

Nike’s confidence in the Brazilian is abundantly clear, and the figures back up their judgement. Last week when Forbes released their annual list of the world’s richest athletes, Neymar’s wideranging commercial appeal was laid bare.

First of all he was the youngest person in the top 100, with his $31 million (Dh114m) haul placing him 23rd overall. That also made him the fifth-highest paid footballer in the world behind Ronaldo, Lionel Messi, Zlatan Ibrahimovic and Gareth Bale.

However, where Neymar differs from the rest is that he is the only player among football’s super rich elite who banks more from sponsorship and endorsements than he does from his salary. The Selecao star collects $14m a year from Barca, but tops that up with a further $17m from his various partnerships, including those with Red Bull, Panasonic, Unilever, Volkswagen, Konami, Beats by Dre and, of course, his long-standing relationship with Nike.

That figure represents around 55 per cent of his total income and in real terms only Ronaldo ($27m) and Messi ($22m) brought in more in endorsement revenue.

As a proportion of total income, the closest anyone gets to Neymar is Ronaldo’s 33.9 per cent. In both 2012 and 2013 SportsPro, a leading authority on the subject, acclaimed him as the most marketable sportsman on the planet based on his age, charisma, the strength of his lure in Brazil (one of the world’s most important emerging markets) and his crossover appeal. Neymar scores highly in every category.

As Forbes point out: “Neymar banked more from sponsors than from Barcelona, something marketing juggernaut David Beckham perfected before him. The difference: Neymar is doing this at 23, before his playing career peaks.

“Part of the reason for the tilt was a bump in sponsorships that came on the heels of the World Cup held in his homeland. His Nike and Beats By Dre commercials were lauded as two of the event’s most memorable.”

As for Nike, so far they have bestowed two custom-designed boots on Neymar, while he was also hand-picked to front the new Hypervenom II campaign.

Signature boots are not just given to any old player as Nike seeks to retain that sense of exclusivity. It’s the sort of special treatment which in the past has only been reserved for Ronaldo, and is a situation bringing great delight to the man himself.

“I have always been a Nike fan, ever since I was a kid, because my idol Robinho always wore Nike,” said Neymar. “This is why I was always a fan, because of him. After a few years I got a sponsorship which made me very happy because it is a brand that I have always liked.”

The mention of Robinho, whose career had probably peaked by the time he was Neymar’s age, seems particularly apt. As you feel while he continues to live the life of an elite footballer and produces the goods for Barcelona, Neymar’s potential, in both a sporting and commercial sense, is limitless.

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#360business: SportsOne going for GCC

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Right mix: SportsOne.

The youngest member of Landmark Group, SportsOne is one hyperactive baby. Launched less than three years ago, the multi-brand sport retail group now has 15 stores across four countries and hopes to have a pan-GCC presence with 25 shops by the end of the year.

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Charting this course of explosive growth for SportsOne is their business head, Shivam Goyal. Having been a part of the Landmark Group since 2004 (except for a brief spell of two years), the 41-year-old Indian has been primarily responsible for the growth of the company.

SportsOne opened its 15th store in Mecca last week, and the plan is to have 40-45 stores by the end of 2016. They will add a fifth GCC nation in September with the launch of a new Oasis Centre in the heart of Muscat in Oman. They have also signed up a location in Kuwait and will have a store there by end of the year, or early next year.

Being part of a massive group like Landmark – which expects to cross $5 billion (Dh18.35bn) in sales this year through their 1,900 stores and multitude of businesses – definitely helps, but Goyal points out that the biggest reason of their success so far is the fact that they have made a conscious effort to understand the market and tailor their offerings accordingly.

Leaning back into the chair of his main office in the Oasis Centre, Goyal explains: “There are a few things that we have done right. We conducted a very thorough research before we entered this line of business. So, we exactly knew where the vacuums were.

“Dubai has got no dearth of good retailers, and the same goes for Abu Dhabi now. But one of the biggest mistakes most international or local retailers do is that they do not look beyond these two cities.

“However, at the Landmark Group, because of our pan-GCC presence, we do look at life beyond the UAE as well. The UAE is very important to us, but we have always thought of ourselves as a GCC-wide group.

“Saudi Arabia, for instance, becomes very important, because out of the 50 million population of the GCC, almost 30-32 million stay in Saudi. Not many companies have the courage to enter the Saudi market, but Landmark has a long and successful presence there. We operate in more than 40 cities there.

"So, we created the concept of SportsOne not from UAE’s point of view, but with the GCC in mind.”

Apart from its geography, SportsOne also concentrated on the demography.

“Another important fact that came out of that study was that our industry catered mostly to males and almost ignored ladies and kids,” adds Goyal, who moved to the UAE in 1997.

“We have made sure that if you visit a SportsOne store, we have given equal weightage to women and children. This has helped us big time, because times have changed and it’s no longer a male-centric market.

“The way things are now, especially with the social media, women are probably more aware of health and fitness issues for themselves and their kids than men. Just to give you an example, our sister company Fitness First now has almost an equal percentage of male and female members.”

Goyal says SportsOne has benefitted immensely by staying true to Landmark Group’s business ethos of concentrating on the middle income group with their pricing.

“Another thing that we never lost sight of was the mid-market bracket. It is very easy to be enticed by the top-most rung of the ladder and cater to the premium market.

“But fact of the matter is that out of the 50 million population of GCC, very easily 40 million would fall in the middle-income group. It is the philosophy of the entire Landmark Group. We never wanted to create a concept that would intimidate the mid-market bracket from entering our store.

“If you start identifying these factors one by one, you’d think they are very common-sense things, but you’d be surprised how many retailers have gone wrong.

In stock: Babolat.

“Another thing we found out, and we have always tried to avoid, is to focus more on the expats. We have guys on the floor who can speak Arabic and make the local people feel at home. We look at ourselves as a bilingual group, and this is fetching us fantastic results, especially in areas beyond the UAE, where Arabic is the more used language.” 

The detailed study, which was carried out in the first half of 2012, also helped SportsOne get its product mix right in the stores. For instance, Goyal reveals there is a very valid reason why his stores are not overloaded with football products.

“When we conducted our survey three years ago, we contacted almost 1,100 people across the Gulf asking them for feedback on certain perceptions,” he says. “One question we asked was which was their favourite sport, and almost 80 per cent of the respondents said football, the remaining 20 per cent said cricket.

“But, when we asked them which sport they played personally, football and cricket were way down in that list. The No 1 sport was swimming. You have pools in your buildings, and you get into it as a family. You go to a resort, and you use the pool there.

“A lot of retailers have made the mistake of thinking that if football was the most popular sport, it also meant it would have the most sales. That’s where they go wrong in the product mix offered to the customers. Football is big, no doubt, but swimming is the No 1 sport if you go by sales. Football sales are confined mostly to children and youth.”

Going ahead, there are three very clear trends Goyal sees in the sports retail business, something that SportsOne are keen to inculcate in each of their new stores.

“I think the biggest trend in our business today is that the consumer is becoming very brand conscious,” he says. “Five-10 years ago, you would have picked any good T-shirt and walked out of the store. Today, if you want to buy a T-shirt, you will look for certain brands. If you want to play tennis, you will not settle for a cheap, fake racquet. You will surely buy either a Wilson or a Babolat or a Prince.

“The second trend is personalisation. Golfers want their names on the cap and the balls, footballers want it on the jerseys. Tennis players want their initials or names embroidered on their shoes.

A range of top brands.

“The more you can think of personalising things for the consumers, the more they like it. Money is not a limiting factor as long as you can make things unique for them.

“The third one is a timeless trend…services have become even very important. If you play tennis, you want to buy your racquet from a shop where you know you can go back and get it strung again if you have any issues.

“If you are buying a bike or some gym equipment from our store, we have got a complete delivery and installation team. And this is something we do free of cost.

“But services do not only mean after-sales services. There are things you can do even before the sale takes place. Like you train your staff to know the products better. We have some 45-50 buying tips in Arabic and English across the shop floor, which makes it easier for a customer to make their choice.”

Despite their rapid growth, and being members of a group like Landmark, SportsOne has kept a low profile as far as marketing and promotion is concerned, but that is about to change in the near future.

“We are just three years old, and this brand has to live for 100 years. Micky Jagtiani, the founder of our group, always tells us not to worry about the first 10 years, worry about the other 90,” adds Goyal.

“So, we are in no hurry. We want to make sure we do everything properly. This is a growth stage for us. The focus, at this point, is to establish ourselves and win the loyalty of our customers,” he added.

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#360Business: Striving for a healthy UAE with a cycling revolution

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UAE residents are now choosing healthy lifestyles over indulgence.

Having spent several years of his childhood in Australia, Shahriar Khodjasteh craves for the outdoors and sports so much; it really is no wonder he has made it his business.

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The livewire CEO of Dubai Desert Extreme (DDE) is a keen golfer. But it is his love for cycling that has become his calling card. DDE are the exclusive distributors for Giant, the world’s largest bicycle manufacturers, and are the largest distributors of premium bikes in the region. Founded by Khodjasteh and his brother Shahin in 2001 in a 20 square metre shop, they now aim to become a half-a-billion dirham company in the next five years.

Apart from being distributors of several premium brands, DDE also have a number of Ride Bike Shops, their retail outlet (a new Ride shop opens in Al Seef Village Mall in Abu Dhabi next month); the newly-opened women-only Liv Bike Shop in Box Park Mall; Rage, which offers some of the best skating equipment, and various other lifestyle products.

It’s not always been hunky-dory for Khodjasteh, who said his business suffered a lot during the economic downturn. But he never lost hope. Imaginative business practices, attention to detail, dedication and an incredible surge in interest in cycling helped DDE grow by 75 per cent in the last financial year, and 42 per cent in 2012-2013.

Khodjasteh is quick to point out that while cycling is enjoying a boom worldwide, there are special circumstances for the spurt in popularity in the UAE. “Cycling is going through a global boom. Of course, the health side of it is the main factor,” he said.

“I think coming out of the economic crisis, people have put a lot of focus on their health and well being, rather than going out and blowing their money on lavish items. They’d rather invest in something like a good cycle, a membership in a good gymnasium, or exercising equipment.

“But another very big catalyst, especially in the UAE, is the support that cycling has received from the leadership of the country and efforts that have been put behind the sport by the government entities, including the Dubai and Abu Dhabi Sports Councils.

“Whether it be to bring the Dubai Tour, or the Triathlons in Abu Dhabi and Dubai, or mass participation events like Dubai 92…these events have played a major role in bringing more fans to cycling.

“It’s just not road and triathlon, there is a whole lot of other events going on, like mountain-biking. A mountain bike trail was opened last year in Hatta, which has become very popular. The role of the government does not stop there. Apart from the high-quality events, they have also introduced dedicated cycling tracks and the Nad Al Sheba Cycling Park, which is an awesome venue.”

The Dubai Tour has been very good for Khodjasteh’s company, especially with Marcel Kittel, of Team Giant Shimano, winning three of the four stages in the inaugural year.

“It was unfortunate that the result was more or less decided on the first day (when Taylor Phinney won the Individual Time Trial with a huge margin in favourable conditions and won the overall title despite Kittel’s heroics), but there is no doubt that the Tour has been very good for us, as it has been for the industry,” said Khodjasteh.

“We needed something like that. You look at golf. We have so many people playing the sport here and many have taken it up because they have seen players like Tiger Woods and Rory McIlroy in the flesh, and have been inspired by it. Cycling needed a push like the Dubai Tour.

“What I can confirm is that Kittel’s and Team Giant Shimano’s success worldwide has created a huge demand for Giant Propel, the bike that was being used by him. The company is finding it difficult to meet that demand. So, it has been good for our business too.”

Khodjasteh says in the absence of a proper association, and the fact that there are a number of small shops selling not-so-well-known brands, it is difficult to estimate the size of the market, and give a definite number on the recent growth.

“There are no official numbers, but we have done our homework and we believe that in the premium bike brand the market in the UAE is between 20,000 to 25,000 units per year. It’s not a big number, but we are talking about a much higher price point – average entry-level bikes starting from Dh2,000 and going up to Dh80,000 for the sophisticated, higher-end bikes,” says Khodjasteh.

“We know this is close to the actual numbers because we sell and distribute Giant bikes, and Giant manufactured bikes for many other companies.

“The growth, over the past two-three years ever since Al Qudra came up and the Dubai Tour started, would definitely be in the very high double digits. The best example I can give is my own company… we have grown 75 per cent in the past one year alone.

“Women’s cycling is something we want to focus on. We believe there is a huge potential there, and I am not just talking from the business point of view. We have a chance to empower women to get out there and cycle and be healthy. And it’s nice socially too for them… it means the whole family can go cycling.

“We have a number of products for youth and kids. I am very excited about a project that I am involved with right now, but I can’t give you much information at the moment. It is like a Youth/Junior Development Programme in cycling like you have in other sports like golf and football.

“One thing we have tried to do since our inception, after realising that there weren’t too many grass-root developments, is focus on that aspect of the sport. We have sponsored events, cyclists and teams at a grass-root level to drive the sport. “We consider ourselves more as marketers rather than traders. We want to promote the sport, and we want to fulfil the needs of people.” 

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