By Joyce Yu
Philadelphia, PA–Team China might be disappointed with their performance at the Winter Games in Pyeongchang, but China’s biggest e-commerce company Alibaba just made its debut as an Olympic sponsor, putting itself under the same spotlight as global brands like Coca-Cola, McDonald’s and Samsung.
Making its public debut on the New York Stock Exchange in 2014 with the world’s largest IPO, Alibaba has been active on the international stage – Chairman Jack Ma frequently attends major international events like Davos, and he drew attention with a private discussion with President Trump last year. However, with its market value bigger than that of Walmart now, Alibaba doesn’t seem to have the kind of instant global recognition that is commensurate with its size.
Counting on its Olympic sponsorship to help change the situation, Alibaba launched its ads campaign earlier this month, featuring stories of underdog athletes or small acts of kindness that took place at past Olympics. All commercials end with this phrase “Alibaba empowers small businesses and young people around the world”, reinforcing the campaign’s tag line “To the greatness of small”.
Alibaba is stepping in “at a very critical time,” the company’s chief marketing officer, Chris Tung, said in an email to CNNMoney. It will use its technology to help make the Olympics “more efficient, secure and engaging,” he added. Junhong Chu, a marketing professor at the National University of Singapore, was quoted in the same report, “For someone who has never heard of Alibaba, its Olympic commercials do little to clarify what the company does. But it might prompt them to find out.”
Against intensified competition from the likes of Tencent and JD.com, global expansion is a logical next step for Alibaba. But to join the elite group as the highest level Olympic sponsor, brands pay millions of dollars, and must commit to a minimum four-year contract and fork over some serious cash. Financial terms of Olympic sponsorships are not made public, but it is reported to Alibaba has spent $800 million to join in 2017. The company and the International Olympic Committee also signed a 12-year sponsorship deal to provide cloud computing services, with plans to incorporate facial recognition technology, as well as e-commerce platform services.
Chief marketing officer Chris Tung said that the company is also in talks with Olympic sponsors P&G, Coca-Cola, Samsung and Intel for collaborations to further other Olympic product activation, according to a Forbes report. Tung also said that at the Pyeongchang Games, Alibaba will take the backseat and learn from the Organizing Committee to understand what the modern Olympics are missing. The company is looking forward to the Beijing 2022 Winter Olympics, more so than the Tokyo 2020 Summer Olympics, to demonstrate its impact.
The last time a Chinese company garnered so much international attention for its marketing campaign goes back to 2010 when Yingli Solar, then biggest solar panel manufacturer in the world sponsored the World Cup in South Africa. The company sponsored the World Cup the second time in 2014. The marketing campaign, especially its first World Cup experience was a success despite deteriorating business performance due to an industrial downturn. Its brand name “Yingli” became so popular that media coverage rose 900% and its website visits jumped five times. The company also had better performance in the stocks market as well.
