London // World Rugby’s deal last month with Alibaba is the latest in an ambitious string of agreements that is making the Chinese e-commerce group a major player in the market for sports rights.
The deal, which will run for 10 years, gives the Alibaba offshoot Alisports access to exclusive broadcast rugby content on its platforms such as Youku Tudou two years before the sport returns to the Olympic Games in Rio de Janeiro.
“The broadcast rights element of the partnership is another example of the diversification of the media landscape around the world,” says Jon Long, the managing director at the Middle East division of the sports research consultancy Repucom.
“It’s not just e-commerce competitors that will sit up and take notice of this partnership but also more traditional broadcasters in China and the wider region.
“While TV rights still dominate the commercial landscape of sport’s major events, today’s industry looks at broadcast differently today than it did, say, five years ago.
“Alisports could seek to become one of the leading sports broadcasters in China, depending of course on the level of investment they are willing to continue to put into the market.”
The return of rugby – in the sevens format – in 2016 as an Olympic medal sport is significant, experts says, as that will stimulate an increase in state investment in the game.
Alibaba’s latest coup also fits with Chinese government plans, announced in 2014, to grow its country’s sports market to more than 5 trillion yuan (Dh2.79tn) by 2025.
A year after making this statement, Alibaba launched Alisports. The business, which is majority-owned by Alibaba, was formed with Sina Corporation and Yunfeng Capital to transform China’s sports industry through internet-enabled technologies.
Since then, Alisports has signed a string of eye-catching sports media deals ranging from online stores for football majors Bayern Munich and Real Madrid on its Tmall platform to a sports rights deal with America’s National Football League.
The NFL deal came in January, a month after Alibaba’s E-Auto project signed a sponsorship with Fifa for the Club World Cup. In conjunction with Shanghai Automotive Industry Cooperation (Saic), Alibaba aims to launch an internet car under the E-Auto project and the Club World Cup deal will run until 2022.
“Hopefully by then [the Club World Cup] will be in China,” says Dong Martin Wang, the vice president for international affairs at Alisports.
That is certainly possible as, while this year’s Club World Cup will be in Japan before moving to Dubai in 2017 and 2018, Fifa has yet to choose hosts for any of the tournaments after 2019.
Mr Martin Wang says that Alibaba will look to help to make China one of the choices as part of plans to expand its range of operations.
Alibaba already co-owns the Chinese Super League champions Guangzhou Evergrande Taobao with the property firm Evergrande Real Estate, and wants to move into event organisation.
After signing the deal, World Rugby said it would work with Alibaba to bring “major rugby events” to China. Bringing Fifa’s Club World Cup to China will also help Alibaba to engage further with the global marketplace, says the Chinese football expert Rowan Simmons.
“In football, the window for top foreign clubs to play in China is very limited, so existing events like World Club Cup are obvious targets,” says Mr Simmons, who has lived in China for two decades and is the author of a book on Chinese football called Bamboo Goalposts.
A 2019 Club World Cup in China sponsored by Alibaba would help Alisports plan to capitalise on its position as the dominant e-commerce player with platforms ranging from Alibaba.com and Juhuasuan to Taobao Marketplace.
With nearly 500 million users, Alibaba has more than 80 per cent of China’s e-commerce sector and wants to tap into the sporting aspirations of this customer base.
Alisports will do this, says Mr Dong, through persuading Chinese sports federations to split their commercial and grassroots activities and use this change to build commercial alliances.
“We believe that national associations can be more focused on grassroots and national teams,” he says.
“Sports are better operated in this way. Then they can be focused on growing at a grassroots level from juniors to women and mens’ to go out and represent China at all levels. The leagues should be more professionalised.”
As an example, he cites Alisports’s joint venture with China’s national general administration for sports to attract players and fans of two of the country’s most popular sports, badminton and table tennis.
“We are setting up fan-based administrative systems so fans travelling from Shanghai to Beijing can find someone to play against, or what beautiful bat that they want to buy, or we can help them book sessions with a coach,” says Mr Dong.
Alisports expects to have a joint venture company set up by the end of this year and is aiming for a combined total of 10 million real names registered for both sports through its new platform.
All this is a huge change for the company set up by the former English teacher Jack Ma from his one-bedroom apartment in Hangzhou in 1998. When Mr Ma, now one of the richest men in the world, floated the company on the New York Stock Exchange in September 2014, at the end of the first day of trading Alibaba was valued at US$231 billion – more than Amazon, Facebook or eBay.
The company certainly has big ambitions but Mr Simmons points out previous attempts to follow this model in China, such as Dongba Sports and Shaonianyundongjia, have failed.
“In terms of a grassroots platform or app for people to organise matches, buy kit, there have been many attempts already,” he says. “They have all failed because this is not the way that people consume sports in a normal sports nation.
“There are real questions about how they can make money from this consumer side of sports. Organised amateur sport is a hyper-local business everywhere and very personal in nature.
“Their model is virtually the opposite and works on reaching national audiences with template offers. As soon as a general customer finds their sport and establishes a relationship with local club, the app is useless.”
Alisports appears unconcerned and has similar ventures planned for Chinese archery, basketball and baseball that stretch beyond simply attracting consumers.
“We will be looking to work with these governing bodies, says Mr Dong, adding: “All the Olympic sports are of interest.
“If we can get people to promote their sport using our platform, then we are also interested in organising their sport. We would be happy to work with them and help them operate their events and give them online and streamed coverage.
“We are trying to be more down to earth but having the rights to operate these events is great. Associations can use our forte in cloud computing and big data,” he says.
“We have 500 million consumers using our e-commerce service, so that’s a really valuable asset that we can offer.”
The group’s strategy of combining major events with the hyper-local amateur level sports remains untested.
Whether those 500 million or so users can be convinced to organise and buy their sporting requirements through Alibaba’s various platforms remains to be seen, but the group’s online sports presence looks set to grow regardless.
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