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Japanese companies are in trouble because of the Olympics


In 1964, the world watched the Tokyo Olympics via the first worldwide satellite broadcast using a giant antenna developed by NEC. In the Tokyo Olympics Starting in July, the NEC will once again roll out new technology.

The company’s facial recognition system will be installed in stadiums to identify athletes and staff as the government presses ahead with what it has promised will be “safe and secure” games despite the Covid-19 pandemic.

But there will likely be little promotion by NEC or other Olympic sponsors of the technology used at the Games this summer, whether it’s related to Toyota’s self-driving vehicles or Secom-developed security robots.

As one sponsor grimly admitted, silence is the best marketing strategy for navigating a toxic environment where any association with the event is likely to Harm the company’s brandعلامة.

Another chief executive quietly retracted a comment he made to the Financial Times a few months ago that he loves the sport and wants the Olympics to continue, saying what would have been a harmless comment in any other context is inappropriate given the ongoing public opposition to the Games.

In another sign of just how dire the current situation is, the NEC has unexpectedly been drawn into a scandal revealing how much the Olympics raised the stakes for both the Japanese government and companies.

Since Friday Takuya Hirai, the country digital minister, was the talk of Japanese TV shows after a Leaked recording Obtained by Asahi newspaper. He was heard urging his subordinates to use “threats” against the head of the NEC. One comment from the online conference in April particularly stands out: “If they grumble too much about these Olympics, we will completely marginalize them.”

At the heart of the incident is a $66 million contract — apparently unrelated to Olympic sponsorship — signed between the government and a consortium that includes NEC to develop a smartphone app to track the health of foreign spectators and other staff associated with the Games. . With the decision to ban overseas spectators, the government requested the cancellation of its contract with the NEC.

Japanese Digital Minister Takuya Hirai defended the use of his language as a reflection of “strong determination” to cut costs © Kyodo via Reuters

Hirai has since admitted that his comments were inappropriate but denied that they were directed directly against the NEC. He also defended the use of his language as a reflection of his “strong determination” to cut costs. NEC declined to comment beyond confirming its acceptance of the contract change.

The incident may have been a ministerial gaffe, but for the NEC and 46 other Japanese companies that collectively paid more than $3 billion to support the Games, there are serious questions to be asked about whether the Olympics link is really worth their money.

Games are set to be most caring A sporting event in history, but even before it was postponed due to the pandemic, some CEOs privately expressed skepticism about the returns on their investments.

While the decision to participate in what was initially considered a national project seemed low-risk, companies accepted non-exclusive contracts, creating a situation in which direct competitors such as Japan Airlines and ANA Holdings were sponsors.

When Tokyo last hosted the Games in 1964, official and exclusive corporate sponsorships had yet to be established, and the companies that took part in post-war Japan to prove their revival from defeat seemed almost natural. But that same patriotic spirit will no longer suffice to justify her sponsorship this year.

The public sentiment is sure to change by the time the Games are held because the vaccination program is gaining pace, and companies – albeit belatedly – may be able to reap the marketing benefits they have been hoping for.

But even if they can navigate these games safely, another minefield awaits Olympic sponsors around the world like Toyota and Panasonic. The 2022 Winter Olympics in Beijing are approaching and companies are likely to do so Under pressure from the activist To take a stand against China’s human rights violations in Xinjiang.

For a long time, Japanese companies simply viewed sports as something they needed to support, but further development will be required as sponsorship of the Olympics becomes political and controversial.

kana.inagaki@ft.com



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