Corporations and local firms are vying for business at the Games, writes Clifford Coonanin Beijing

THE SIGHT of six-time Olympic medallist Li Ning in the Bird's Nest stadium lighting the Olympic flame while suspended from wires will have cheered many a Chinese heart, but caused palpitations among Olympic sponsors such as sportswear company Adidas.

Adidas spent nearly €130 million in Olympic sponsorship and marketing but was well and truly "ambushed" by Li Ning, whose own sport apparel company goes head to head with Adidas in China but is not one of the official sponsors.

China's huge domestic market remains largely untapped, and it is this that has persuaded the world's biggest corporates to spend hundreds of millions of dollars on sponsorship and advertising. Not bad for a marketing business only a quarter of a century old.

The Beijing Games have already brought in about €3 billion in rights and sponsorship deals, but "ambush marketing" techniques, where a company manages to link itself in the public's mind to an event that one of its rivals is officially sponsoring, is becoming a major issue at sporting events such as the Olympics and has made the Beijing Games a risky proposition for some sponsors.

At previous Olympics, many people listed Nike as one of the most visible brands at the Games, despite the fact the firm did not sponsor the event, but used advertising at other points in the host city and other promotional methods at the same time, piggybacking on Olympic fervour.

Nike and swimwear firm Speedo have focused on individual athletes or teams, saving them the cost of a huge sponsorship.

The branding of the Olympics is astonishingly comprehensive. In the Olympic village and broadcasting centres, every item not made by an official sponsor has been taped over, from elevator makers to computers.

Every television presenter on CCTV, China's largest TV network, uses a laptop rebranded with an outsized Lenovo logo - switched around to read the right way up on TV. There was a huge row over the way Li Ning arranged for the sportscasters of CCTV to wear the company's apparel during the Games.

Even electronic lights waved by spectators at the opening ceremony were toy torches from a private firm called Memsic, which was taking its chance to promote itself as a supplier of tech consumer products.

Li Ning is a legend in China. He was the first Chinese gymnast to win a medal in the Olympics, winning three golds, two silvers and a bronze in the 1984 Los Angeles Games. He set up his sportswear business after Seoul in 1988, and was number one until Nike, which now has 16.7 per cent market share, and Adidas, with 15.6 per cent, started a major push in China, leaving Li Ning with 10.5 per cent.

Fears of pressure from Nike and Adidas have hit Li Ning's company hard this year, and flagging share prices in Li Ning's company rose sharply on expectation that he would appear in the opening ceremony, and rose another 3.4 per cent on the Monday after the event.

A big part of the problem is that local advertisers have an advantage in China because of familiarity. Samsung has spent millions of dollars building its TV brand, but surveys show that local producer Changhong, which has done a lot of advertising separate from the Games, has greater Olympic recognition.

The International Olympic Committee has 12 top global sponsors paying up to €66 million apiece, including Coke, General Electric - which owns NBC Universal, the holder of exclusive US television broadcast rights for the Games - and McDonald's.

Coke is the longest continuous Olympic corporate sponsor, dating back to 1928, and it recently signed a deal to extend that relationship through 2020. Chinese consumers voted it the brand they most closely associated with the Games, so they are clearly doing something right.

The negative publicity from association with events like the crackdown on Tibet does not have an impact in China itself and that's the market in which the corporates are keenest to expand.

Coke's rival, Pepsi, has brought in a red can of soft drink for the Games, claiming they wanted to be more patriotic. And what other soft drink company has a lot of red in its design?