Alibaba has entered the world of big budget advertising, as it joins the ranks of giants like Coca-Cola and Samsung, thanks to a deal between Alibaba and the Olympics Committee, under which Alibaba is the official lead sponsor of Olympics Games until 2028.
Besides being the lead sponsor, Alibaba will also provide cloud computing and data analytics services until 2028. This is obviously a big opportunity for Alibaba as it takes on global leaders in the cloud market such as AWS, Microsoft, and Google. Currently, Alibaba’s cloud service called Aliyun is nowhere near the ranks of giants like IBM, AWS and Microsoft, but it hopes that this can change over the next decade or so.
In a way, this is a strategic move by Alibaba as it gives them the much-needed exposure on the global stage. There is no event greater than the Olympics, and being a lead sponsor, means Alibaba is going to be known across all countries that’ll participate in this event. This exposure can propel Alibaba into the limelight, and can even help to increase its revenue and profits.
Other than this benefit, it gives a huge boost for its marketing campaigns as the company can now sport the Olympics logo in all its marketing material. It’s the first Chinese company to do so, and is also the first Chinese sponsor of the 2022 Winter Olympics slated to be held in Beijing. The revenue that it’ll gain from such an exposure is likely to run into billions, and even has the potential to put the company right among the top cloud players of the world. Specifically, the benefits for the Chinese market are expected to be simply enormous, as it can create a separate Olympic channel to sell its merchandise geared towards a Chinese audience.
Over the last few months, Alibaba is plagued by counterfeit products, and it’s doing its best to weed out these violators. According to Jack Ma, the CEO of Alibaba Group, it has employed more than 2,000 people to identify those who are selling counterfeit products on its e-commerce sites, and the company hopes to remove this problem at the earliest. The International Olympic Association also understands this problem, and even lauded Alibaba’s efforts in this regard.
Despite this drawback, the Olympic Committee accepted Alibaba, and this could be partly because of a heavy sponsorship fee. At this point, the amount of money paid by Alibaba for this coveted partnership is not known. Jack Ma refused to divulge into the details, and opined that this is not just a sponsorship, but a partnership deal.
If you’re wondering how Alibaba got this idea, it simply took lead from the Chinese government’s new policies. Recently, the Chinese government called on all local companies to promote the sporting sector in a big way, and Alibaba simply took this idea to the next level.
Alibaba’s first event will begin in 2020 at Tokyo. It’ll be interesting to see how much money Alibaba will make from the deal, and if it’ll be more than what it spends by way of cloud computing infrastructure and the hundreds of millions of dollars as sponsorship fees.
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