IOC boosts commercial power with Alibaba deal

Jack Ma and Thomas Bach exchange gifts to seal the deal Keystone

The Olympic Games movement has reached a new pinnacle of commercialism, teaming up with Chinese e-trading platform Alibaba to better sell branded mascots and other merchandise to the world.

The Lausanne-based International Olympic Committee (IOC) made the announcement together with Alibaba at the World Economic Forum’s gala Davos event on Thursday. The deal gives the IOC access to one of the world’s biggest digital retail platforms while Alibaba will benefit from access to a vast pool of sports fans buying goods on its platform.

Neither party was prepared to sully the announcement of their “marriage” with talk of finances. It is unknown, for example, how much of a cut Alibaba will get from each sale. Jack Ma, Alibaba’s founder and executive chairman, preferred to talk about the currency of helping to make young people’s lives “healthier and happier” with his company’s involvement.

It will also do this by providing cloud computing services to help the IOC manage Olympic Games and partnering in the Olympic Channel – a digital platform for fans to watch videos of their sports heroes and keep in touch with events.

In the 2013-2016 cycle between summer Games, the IOC has forecast revenues of $5.6 billion (CHF5.6 billion). Of this amount, only about 3%-4% is generated from licensing – or the sale of goods branded with the IOC label. As a non-profit organisation, the IOC distributes its profits back into its national members and into developing grassroots sport.

Alibaba has been experiencing some bad publicity from counterfeit goods being hawked on its platform. How would each side cope with this problem, journalists asked at Davos press conference.

Ma said it is was difficult keeping up with 1.2 billion products traded on its site every year. “We have been fighting against counterfeit products since the day we set up,” he said. “The whole world is in a big mess over counterfeiting and it is not easy to kill human greed. But I promise the IOC that we will clean the carpets in every room.”

IOC President Thomas Bach said Alibaba’s centralised retail platform should make it easier to trace goods being bought and sold across the world than with the present system that is currently fragmented between different countries. “This will offer us better potential to control the problem,” he said.

During his visit to Switzerland this week, Chinese President Xi Jinping became the first Chinese head of state to visit the IOC’s Lausanne HQ. Beijing will stage the 2022 Winter Olympics, making it the first city to host both summer and winter events.