Companies see limited Olympics' impact
A woman wearing a protective face mask walks past a sign promoting the upcoming Tokyo Olympics at a bus stop in Bangkok, Thailand, Monday. EPA-Yonhap
By Kim Yoo-chul
By Kim Yoo-chul
Conglomerates here have lowered their expectations over possible marketing benefits from the Tokyo Olympics as the coronavirus outbreak has now gone worldwide, leading to the possibility of a postponement of the Games.
Samsung, LG, and SK technology affiliates as well as Hyundai Motor Group, the country's leading exporters, have long used major sporting events such as the Olympics and World Cup to boost the sales of their latest gadgets, leading to increased profits.
But the rapid, alarming spread of the coronavirus around the globe, has unsettled the stock market and caused huge operational disruptions in almost every industry spanning from consumer electronics to retail and travel. How long the virus will last is uncertain and the chances are very low that countries would be willing to send large squads of athletes to Japan for a month.
As of March 15, the number of the coronavirus infections reported in Japan topped 1,500. The government there is implementing travel restrictions and asking people to avoid mass gatherings, according to media reports.
“We have to be realistic. Mass gatherings are a high risk and so we don't think the upcoming Tokyo Olympics will bring a lot of benefits. Samsung plans to move forward with scheduled marketing activities, but some, less predictable consequences are expected,” an official said. Along with Toyota, Bridgestone, Panasonic and other global firms, Samsung has signed sponsorship deals with the International Olympic Committee worth hundreds of millions of dollars.
The world's top TV producer was expecting the Olympics to drive sales of its premium models. As NHK, the official Japanese broadcaster of the Olympics, was to air all games live using 8K viewing technology, Samsung was planning to promote its 8K TVs.
Some officials in the local technology, retail and automotive industries remain cautious in adjusting their advertising forecasts, especially as the the Olympics schedule depends on whether the COVID-19 outbreak tails off with the approach of summer. For them, what matters most is how the heavily-wired digital connection will impact marketing, if people have no options but to stay inside.
“Lots of retailers are going to be probably reeling from the possibly scaled-down Tokyo Olympics. Lotte, Shinsegae and other big retailers are assuming the Olympics will take place until they are told otherwise. While it seems quite early to say what measurable impact there will be, one thing that is clear is the impact of the Olympics will now be limited,” a senior Shinsegae executive said.