Chinese e-commerce giant Alibaba signs 12-year deal with International Olympic Committee
Alibaba now joins McDonalds, Coca-Cola and Visa as the top sponsors of the Olympics.
What’s the story?
According to CNN Money, Chinese e-commerce giant Alibaba has announced a 12-year deal with the International Olympic Committee (IOC) to provide technological support during the Olympics. The partnership was announced at the World Economic Forum in Davos. According to Bloomberg Reports, the deal is worth around $800 million.
Michael Payne, the director of marketing and television for the IOC said after the confirmation of the deal, “It is far more than a sponsorship. It is getting into revolutionising the technology management in support of the Games, including the latest in digital technology and social engagement.
“This deal is not about sticking the Olympic rings on a product but a fundamental partnership for the future of the Games,” Payne further added.
In case you didn’t know...
Founded by Jack Ma, Alibaba is one of the largest e-commerce companies in the world. In 2016, Alibaba surpassed Walmart as the biggest retail company worldwide. Alibaba entered India's e-commerce space with a 25% stake in Paytm alongside owner One97.
Over the past couple of years, Chinese companies have spent billions on sports after President Xi Jinping decided to transform China into a “great sports nation.” Since then, spending has gone up staggeringly, with the Chinese Super League especially lavish in their spending habits.
The heart of the matter
According to the terms of the deal, Alibaba will become IOC’s official Cloud Services and e-commerce platform services, partner. Alibaba would also have to build a new shopping platform for Olympic merchandise and develop an Olympic-affiliated digital TV channel in China.
Following the completion of the partnership, Alibaba now joins McDonald’s, Coca-Cola and Visa as the top sponsors of the Olympics for the next six Games.
E-commerce has grown steadily into a booming business. The number of online shoppers has increased by nearly 20 million between 2015 and 2016. Thus, the partnership exposes the Olympics to a major market in China.
Alibaba became the second Chinese company after Lenovo to partner with the Olympics Games. The deal, in exchange, would help better expose IOC's Olympic merchandise to the Chinese market.
With China hosting the Winter Olympics in 2022 and also aspiring to make a potential bid for the World Cup, these kinds of sponsorship deals will help the nation win the support of major governing bodies in the future.