Suning Takes Control at Inter Milan

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Suning storeRetail giant Suning of China takes 70% of Italian football giant Inter Milan for 270 million euro. The "Best Buy of China" is the first Chinese investor to control a top European soccer team.

Inter Milan won 18 Italian Serie A league titles and three UEFA Champions League trophies, but has been struggling after winning the European Champions League in 2010. The team finished 4th in Serie A this season and hasn’t qualified for the Champions League since 2012. New owners will mean new money and new opportunity.

Suning Commerce Group is one of the largest privately owned retailers in China, headquartered in Nanjing. [See the impressive photo of its HQ below.]

Suning operates more than 1600 stores covering over 700 cities of Mainland China, Hong Kong and Japan-- and its e-commerce platform, Suning.com ranks among top three Chinese B2C companies. Alibaba Group Holding Ltd. has bought a 20% stake in Suning as the company moves from its original producty mix of appliances and electronics to a wider selection.

Zhang Jindong, Suning’s chairman says this Inter Milan deal is a significant milestone in Chinese soccer history, and called China "Inter Milan’s second home." In fact, Inter Milan is now committed to visit China each year over the next five years.

He expects to inject capital and resources into the Italian team to help Inter Milan "dominate" the game in Italy and Europe--and that the takeover "will mark Suning’s official entry into the European market."

That remark could prove interesting as Suning is not just a footy fanatic but usually leverages its sponsorship for its retail and ecommerce sales.  Although in 2013 Suning opened an R&D Center in USA as the company's high-tech hub for developing e-commerce services( improved online searching, Big Data, collecting data on shoppers' habits, etc) and said rhis would mark the company's entry into California and the start of what Suning hopes will be a rapid U.S. expansion. That hasn't happened, although the R&D center itself has grown in number of employees.

Suning HQ

It isn’t clear how Suning will finance the Inter Milan deal and the promised expansion of club resources (the acquisition alone is more than twice the company’s $133.2 million net profit last year).

Yet Suning is building a soccer empire. In 2013, it invested in PPTV, an online video live-streaming site for China’s soccer fans. Suning signed a deal to broadcast the Spanish Soccer League games through its platforms-- it also wants to become a major digital sports broadcaster in China.

Late last year, Suning purchased a local Chinese Super League team in Nanjing and named it Jiangsu Suning F.C. (now in third place in China’s Super League 11 games so far this season.)

Within a month it twice set China’s transfer-fee record, by buying Brazilian star Ramires from Chelsea for £25 million and Brazilian midfielder Alex Teixeira for €50 million (from Ukrainian team Shakhtar Donetsk).

Suning & FC Barcelona

The loser here may be FC Barcelona.  In 2013, Suning Company had an agreement that made them the Club’s first-ever Chinese sponsor.  More than a sponsorship, it was a strategic partnership involving a series of social and sporting projects. These included the promotion of sport among young Chinese people. Suning set up football camps and tournaments to foster the game in different Chinese cities.

The agreement made Suning an official partner of FC Barcelona’s fan base in China with a Barça microsite on the official Suning website,  the meeting point for FCB supporters around China-- where fans could purchase Barça branded sports products. Suning no longer appears on the FC Barcelona sponsor or partner page.

The company has always been one of the Chinese Government’s closest allies in campaigns to promote sport at schools. The world’s most popular game now has a big soccer fan in President Xi Jinping who ascended to power in China in 2012. Two months after Xi visited Manchester City Premier League club last year, a consortium of Chinese companies said they would invest $400 million for a minority stake in the club.

Last month, a Chinese businessman payed at least £75 million ($109 million) to acquire soccer club Aston Villa, (after its relegation to England’s second-tier division).

Wang Jianlin, China’s richest man, bought a 20% stake in Spanish powerhouse Atlético Madrid last year.

All this is no accident: China’s top economic-planning agency, the National Development and Reform Commission, has put forward a plan for China to become a “top-quality soccer power” in the next 20 years.

You may have also noticed a burst of Chinese acquisitions: this followed a downturn in the Chinese economy as the big companies are forced to look globally for the highest growth. That makes Suning's commment about "entering Europe" more believable. Certainly there are big CE retail groups looking for buyers.

In one last ironic twist, the company that owns Inter Milan’s biggest rival and neighbour,  A.C. Milan, says it, too, is in negotiations with a consortium of Chinese investors.  Imagine if that consortium includes Suning's biggest retail rival, GOME...  That would really be a fine example of moving the goal posts.

Go Suning Group (in Chinese only)

Go China's Suning buying majority stake in Inter Milan for $307 million