The International Olympic Committee (IOC) has sealed a long-term partnership with the Alibaba Group, under which the Chinese online giant will become part of The Olympic Partner, the IOC's global sponsorship program. The deal, which was unveiled at the World Economic Forum in Davos earlier this month, marks a far-reaching tie-up between the two organizations, contributing to Alibaba's growing involvement in the global sports business.
The Chinese company will be the IOC's partner for cloud services and e-commerce platform services, as well as a founding partner in the Olympic Channel. Thomas Bach, the IOC's president, said that Alibaba would help to make the Olympic Games more efficient, while supporting the development of digital opportunities for the Olympic movement.
The e-commerce platform to be run by Alibaba will provide official Olympic licensed products and selected sports products on a global basis. Alibaba's insights will also come in useful to customize the Olympic Channel for a Chinese audience. Then again, the partnership could face some criticism because Alibaba has recurrently come under scrutiny over the counterfeit goods allegedly sold on some of its platforms.
The IOC said Alibaba is the first company to make a long-term commitment to it though 2028, and the first Chinese company to commit to the Winter Olympics to be held in Beijing in 2022. Alibaba's rights will include advertising and promotional use of Olympic marks and imagery from the Olympic Games as well as marks from the National Olympic Committees.
Alibaba, the group behind Taobao and Tmall, saw its net income soar by 43 percent on a sales jump of 54 percent to US$7.7 billion (increase of 54 percent for the three months until the end of December, the third quarter of its fiscal year). Sales were pushed up by Singles Day and increased sales from its cloud and digital media business. The company said it would be raising its full-year guidance for sales growth from 48 percent to 53 percent.
However, the deal with the IOC is aligned with Alibaba's strategy to build up new revenue streams with data, cloud, artificial intelligence and logistics projects. Sales generated by Alibaba's core e-commerce business made up 87 percent of its entire turnover for the third fiscal quarter, compared with 92 percent for the same quarter in 2015.
The Chinese company established the Alibaba Sports Group in 2015, together with Sina Corporation and Yunfeng Capital. The idea at the time was to leverage Alibaba's large e-commerce footprint in China with Sina's media resources to create an integrated, internet-based sports platform for the benefit of the sports industry, sports teams, sports fans and other consumers.
