The Springboks have been eliminated from the Rugby World Cup at the hands of defending champions, the All Blacks. And while South Africa have lost out on the chance to lift the famous trophy for the third time, there has still been a significant amount of positivity around the Rugby World Cup. No I’m not talking about the rise of Schalk Burger or the emergence of Lood de Jager, but I’m rather putting my professional cap on and talking about the financial gains that will be experienced as a result of arguably the most supported competition in our country.
In 2010 the FIFA World Cup saw South African markets rise specifically building and leisure stocks, while hotel stocks also soared. In 2007 when the Springboks lifted the Rugby World Cup it was coupled with a 4.3% increase in the Rand / Dollar exchange rate for the duration of the tournament. Ultimately sport has become business and we decided to have a look at the winners in terms of who would could have expected growth in their revenue through the Rugby World Cup and their association with it.
The timing of the Rugby World Cup could not have been better as the emergence of Summer already meant that the most popular place to be on a Saturday afternoon was with a bunch of mates around a braai. With the regularity of braai’s being weekly shops like Checkers could expect to see a spike in revenue related to meat, charcoal and drinks. You really don’t need to look much further than the length of the queues at any grocery store before a game.
SAB and in particular Castle Lager have long been associated with South African rugby and the Springboks have duly helped their sales (and also their consumption if you know how much our boys love their beer). Their share price has already rocketed with the news that AB Inbev had made an offer to purchase which would be accepted by the board and we already know that SAB saw a 7% increase in their share price during the 2007 Rugby World Cup. We love a beer in this country and SAB Miller will be enjoying it all the way!
Mr Mbalula has done something pretty good for the country in introducing sport related Fridays. Around the country more and more people are jumping on board to make sure they also have the national shirt. The further the Springboks went the more people wanted to acquire their shirt or variants to wear on a Friday and a Saturday. Asics will also slowly start to find the loyalty factor will continue to grow as fans quickly pick a pair of Asics equipment over their counterparts. It’s a difficult amount to compute, but long term growth will definitely be conceivable.
The rise of the UBER in South Africa will only be enhanced by the Rugby World Cup. The Ecomobility month in Sandton also brings it into attention in a radical way. More and more South Africans are vying away from drinking and driving and rather using UBER as a way to get around. With the Rugby World Cup hosting fan parks like ABSA Boktown and Birchwoods Rugby Festival, there is a more and more need for the taxi service to assist in delivering people safely. Expect the amount of new users to have increased dramatically throughout the month.
Even if it is something they will benefit more from in the long term, the association with the Springboks and the coverage that produces will enhance the brand asset of ABSA. The ability to have their branding all over the place as well as various advertisements will enhance the market presence which, although not necessarily immediate, will surely result in some market growth for the banking giant.