The deal will last through 2028. Considering the next three olympics will be in Asia – South Korea in 2018, than Japan in 2020, than China in 2022 – Alibaba may have seen this as a good time to put itself on the world map as well as bolster advertising efforts in Asia.
Alibaba will be joining the Olympic’s highest sponsorship level – alongside worldwide brands like Coke, McDonald’s and Visa. While Alibaba wouldn’t say how much the sponsorship cost, the Financial Times has estimated it may be as much as $600M for the lifetime of the deal – which would break down to $100M paid by Alibaba per every olympic meeting through 2028.
The deal is more than advertising though. The Olympic Committee said that Alibaba will also contribute their cloud computing infrastructure and cloud services “to help the Olympic Games operate more efficiently, effectively and securely, including supporting big data analytics requirements”.
Since the cloud wars are just beginning, it’s a big deal for Alibaba that the deal is 12 years long. Considering 12 years ago AWS hadn’t even launched , imagine how much the industry will change in 12 more years. And even if there are new players (or existing players like AWS expand their domination) Alibaba’s cloud division will still have at least one notable client and event to support.
In addition to cloud support, Alibaba will also be using its e-commerce experience in the deal. They will become an “E-Commerce Platform Services” provider, meaning they will build out functionality for the Olympic Committee and other authorized retailers to sell Olympic-branded merchandise online.
Check out the video below from Davos to hear from Jack Ma on how the deal came to be.