Alibaba solidifies its sports strategy with creation of Alibaba Sports Group

Written by Qinwen Wang || 09 Sep 2015

As a national idol and a self-made billionaire in China, Jack Ma has already shown how he could change the e-commerce industry. He is now creating an internet entertainment empire with Alibaba's previous expansion into music and movies, and now sports.

The establishment of Alibaba Sports Group was created with the goal to “transform China’s sports industry through Internet-enabled technologies.” According to Alibaba’s press release, “Alibaba Sports Group will engage in sports media, events, ticketing and other aspects of the industry, leveraging Alibaba Group’s extensive e-commerce, digital entertainment, marketing, cloud computing and other Internet properties.”

Alibaba Sports group is backed by the private equity company Yunfeng Capita (founded by Jack Ma and by Sina Corp) and it is likely another cross-sales / O2O play for the internet giant. Before the official establishment of the sports group, Alibaba’s B2C online shopping site Tmall already had official online merchandise sales collaboration for popular European football clubs Bayern Munich and Real Madrid, and NBA star Kobe Bryant's documentary was first released through Alibaba’s Tmall set-top Box.

Thus, it seems that future more merchandising of sports club will come into China through Tmall. This fits not only with Alibaba's multi-channel media & merchandising approach, but adds strength to the company's Tmall Global program. One could imagine there are also some strong Online to Offline (O2O) opportunities for the company by selling tickets for events, etc..

It is obvious that the lucrative sports industry will diversify Alibaba’s current business and change the landscape of the industry. What is interesting is that it comes just a few weeks after Wanda purchased the Ironman brand - a global triathlon brand worth several hundred million USD. It seems like more and more large Chinese conglomerates are moving into entertainment and sports.

Beyond the business justification, there may also be political reasons. It is well known that many of China's senior leaders are football fans and have not been particularly happy with the performance of China's football teams as of late. Wanda also bought a 20% stake in Spanish soccer club Atletico Madrid which could potentially help them develop the sport domestically.

What Alibaba actually does and includes in the sports group is a bit unclear at this point, but it certainly makes a lot of sense for the company as it uses its e-commerce base to move into O2O and entertainment opportunities. But will it be a game-changer?

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