With valuable local partners and a new office in Hong Kong, Tennis Australia’s expansion into Asia seems set. Commercial director Richard Heaselgrave shares the company’s winning strategy for other businesses that are considering a similar move.
When Chinese tennis champion Li Na slammed her way to victory in the 2014 Australian Open women’s final, it signaled a new world of opportunity for Tennis Australia. The Grand Slam of the Asia-Pacific had been planning its move into the region. The popular tennis star’s win was bound to get it across the line.
While Li Na’s success has increased the appetite for the sport across the region, Tennis Australia’s push into Asia has come with valuable lessons. Like any businesses with ambitions in Asia, it has experienced challenges in recruiting the right team and forging partnerships to help open doors in the engine room of global business. Maintaining a clear and measured approach has been key to the organisation’s success to date and there may be lessons in this for other businesses.
The push into Asia began taking shape with the recruitment of commercial director Richard Heaselgrave at the start of 2014. The former chief commercial director of The Football League in the UK, Heaselgrave is experienced in securing the kind of international broadcast deals that Tennis Australia’s expansion depends on.
“Broadcasting is your basis for expansion because then you’re distributing all your matches and your content,” he explains.
“Then you can start to grow your fan base.”
Their expansion model is based on adding one new market each year. First stop is China, where around 110 million tennis fans tuned in to last year’s  Australian Open. Next stop will be Japan, where the tennis fan base has swelled thanks to the success of local player Kei Nishikori. Around 125 million viewers in Japan tuned into the event in 2015.
The organisation’s first move in China has been to secure valuable broadcast deals with some of the country’s largest media companies, including CCTV, Shanghai Media Group and various digital broadcast partners.
Next up was a partnership with the Shanghai Rolex Masters, which will see the two tournaments share information and resources.
“In terms of how connections with business and government are facilitated, Shanghai Masters has been doing this for a long time and their help in that area is very important for us,” explains Heaselgrave.
A local presence
Tennis Australia formally announced its presence in China with the opening of a Hong Kong office in October 2015.
“Fundamentally, we believe the basis of building a business, has to be rooted in the community where you’re trying to build it,” says Heaselgrave.
“We can see that to grow revenue streams, we have to be present. We have to be building relationships and we have to have the entrepreneurial zeal to identify them in real time. It’s not about doing a five-year business plan for Melbourne, dropping it into China and seeing how it goes.”
Crucial to the success of the Hong Kong office has been recruiting a team of six that can grasp both Australian workplace customs and Chinese business culture.
“We needed a team that could intersect between the two cultures. This took time,” explains Heaselgrave.
“It’s not about doing a five-year business plan for Melbourne, dropping it into China and seeing how it goes.” Richard Heaselgrave, Tennis Australia
“It’s also been important to develop close working relationships between the Melbourne and Hong Kong offices. We don’t want the Hong Kong office to be a satellite working in its own orbit. That needs constant care and attention. We send people up and back as regularly as possible and the China team spend time here in Melbourne.”
A key challenge for the sporting giant’s international expansion has been a hard one to shake off.
“We’re a tennis federation that bears the name of a country. As we move our business into China and Japan, they have their own tennis federations and we have to be careful not to tread on any toes,” says Heaselgrave.
“We’re offering involvement in the Australian Open and making that more relevant is a particular challenge for us.”
Tennis Australia is working to bridge the gap through a series of tennis events in China, such as viewing parties, trophy tours and celebrity weekend tournaments. In a clear signal of its commitment to Asia, it launched the 2016 Australian Open – with ambassadors Li Na, Rafael Nadal and Rod Laver – in Shanghai rather than in its home city of Melbourne.
“You need to be unfettered by geography,” says Heaselgrave. He cites the English Premier League as an example.
“It’s a football league that takes place in England but, broadcast wise, it’s very relevant to millions of people around the world. It’s a television product.”
Eye on the ball
Maintaining a focus on its growth strategy has been key to the business’s progress in China.
“We may be approached by a tennis event in Vietnam or a broadcaster in India, but if you follow all of these opportunities and don’t focus all of your resources on the point where you’ve decided you can make a difference, it becomes difficult. Often you’re passing up opportunities that may be profitable, but you have to try to stick to the greater strategic direction.”
Heaselgrave describes Tennis Australia’s push into Asia as steady.
“If you’re in a rush to grow your business in Asia, you need to be careful,” he cautions.
“You have to have a basis to enter that is profitable. Fortunately, we have partnerships and broadcast deals, which means we start from a profitable base and then can build it with local knowledge as the team grows.
“If we were trying to quantify our progress on a ladder with 10 rungs, we’re probably on rung one. This time next year, we’ll be on rung two. We need to be realistic. We’re in this for the long haul.”
Breakout: A varied landscape
Tennis Australia’s expansion into Asia may present lessons for other businesses, but Hans Hendrischke, professor of Chinese business and management at the University of Sydney Business School, cautions that China is not one market for every business.
“It’s difficult to generalise about China,” he says.
“Mining companies have a competitive advantage simply because there are few other suppliers at a large range. The same can be said for agribusiness, to some extent. Tennis Australia would largely fit within the service sector with global competition.”
Hendrischke adds that as tennis in China is centred on major hubs such as Shanghai and Hong Kong, Tennis Australia is unlikely to face the same obstacles as companies supplying to second- and third-tier cities.
“These companies would be having to deal with local governments and be aware of hierarchies and other cultural elements. For events like the Australian Open, they’re dealing with global players with international experience, so it’s much more transparent.”
5 things your business needs to know when expanding into Asia
1. Opportunities abound – so choose wisely
Asia holds many prospects for international businesses. It may be tempting to grasp every opportunity, but be sure they align with your core business strategy. It’s crucial to maintain your focus.
2. Competition is tough – prepare for a vigorous pace
Economic centres such as China may be more competitive than you expect. To build your connections more quickly, develop relationships with local businesses where practical, so you can tap into their existing networks.
3. Build a base – collaboration is key
If you’re serious about expanding in Asia, you’ll need to have an office on the ground. As well as signalling your commitment to the region, it makes it easier to identify and lock in to meaningful opportunities as they arise. It’s vital to have a good working relationship between head office and these regional bases, so make regular visits and use communication technology that promotes seamless collaboration.
4. Recruit the right people – they will matter most
Recruiting a team that will help bridge any cultural divide is crucial. Have an induction process that clearly outlines your business culture, values and goals, and spend time nurturing your team – they may well be your best asset in the region.
5. One size won’t fit all – expect a mixed bag
Asia is not one uniform market. Even within China there is a big difference between intensely competitive global business centres, such as Shanghai and Hong Kong, and smaller cities that have less experience in dealing with international companies. In the large cities, your toughest competition is likely to be other global players, while in the smaller cities cultural differences may be your key challenge. This makes having the right team even more valuable.
CPA Australia is the official accounting and business partner of the Australian Open since 2014