Bottom line: Wanda’s first major made-for-China sporting event, a bicycle tour of scenic Guangxi province, looks like a well-conceived initiative that could auger well for its longer-term effort to tap the Chinese sports market.
Following its opening of several massive theme parks across China, entertainment aspirant Wanda Group has just announced the launch of what it hopes will become one of the nation’s premier sporting events that can earn a place on the global bicycling map. That announcement has Wanda pedaling its new Tour of Guangxi event, which will take cyclists through one of China’s most scenic provinces that includes the famous craggy mountains surrounding the city of Guilin.
I’ve been watching closely as Wanda unveils each new leg of its efforts to bring world-class entertainment to the underserved China market, and have to say this looks like one of the better-conceived ones. I’ve been a bit critical of many of the earlier initiatives, most of which involve massive Wanda Cities in obscure locations anchored by theme parks and including major residential and major retail components.
By comparison, this particular initiative looks quite intriguing, partly because it’s only a once-a-year event and thus won’t be prone to seasonal elements. It also won’t rely on China’s hugely speculative real estate market, which is a central component of the Wanda Cities. What’s more, Guangxi really is one of China’s most scenic provinces, with lots of mountains but also plenty of flatter terrain. That could make it an attractive spot for both cyclists and also millions of fans who might want to combine a trip to watch the event with a visit to the province.
Wanda’s billionaire founder Wang Jianlin presided at a ceremony to announce the event, and in his usual overstated manner said he’s aiming to build up his Tour of Guangxi to the same status as the Tour de France within 5 years. (Chinese article) Wanda also announced its initial sponsor for the event will be Gree (Shenzhen: 000651), the home appliance maker that is somewhat embattled at the moment after its shareholders rejected a pet new energy car project supported by its chairman, Dong Mingzhu.
The event has received authorization from the International Cycling Union, which should automatically put it on the global cycling map and draw lots of world-class riders. Such support will also ensure the event doesn’t conflict with other annual cycling tours, helping to give it a better chance of success.
1,000 Kilometer Tour
Ten teams will participate in the first Guangxi Tour, which will run over 6 days, cover about 1,000 kilometers and run through most of the province’s major cities. In a smart but also quite obvious decision, the event will end in the city of Guilin, providing plenty of pretty scenery for both tourists and media photographers as the racers pass through the finish line.
This will be one of the first major domestic sporting events crafted by Wanda since it purchased European sports marketing firm Infront Sports & Media for $1.2 billion last year. (previous post) Wanda has also made a number of other major sports buys over the last couple of years, including its $650 million purchase last year of the company that stages Ironman Triathon events.
Wang’s sporting purchases are related to, though not completely aligned with his other entertainment and media activities, which includes theme parks, movie theaters and film production. I’m probably most enthusiastic about the film production prong of his entertainment efforts, and least thrilled with the theme parks. Sports probably falls somewhere in between, as it’s a relatively manageable business and China certainly has plenty of potential due to the sector’s poor state of development.
Wanda previously announced it would set up a headquarters for its sports division in Guangzhou. (previous post) I suspect that will be followed by an IPO sometime in the next 1-2 years as it tries to recoup some of the big sums of money he has spent on its various acquisitions.
It’s still early days, but I have to say that this new Tour of Guangxi looks like a relatively savvy first attempt at developing major sporting events just for China that can take advantage of the country’s natural advantages. Accordingly, I’m cautiously optimistic that the sports unit could develop positively with more similar efforts, and perhaps become an attractive investment option when it makes its IPO.