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Alibaba Shoots and Scores with New NBA Agreement | EMQQ

Early in March 2019, the NBA and Alibaba (BABA) entered into an agreement which provides for the distribution of NBA content across Alibaba’s media outlets as well as the sales of NBA products across Alibaba’s ecommerce sites.

NBA Content on Alibaba's Platform 

According to the NBA’s press release, an “NBA Section” will be launched across Alibaba’s platforms.[1]  The new section will allow fans to view NBA content as well as shop for NBA merchandise all on one platform.

NBA game highlights, original programming, and classic NBA games will be offered to Alibaba users.  The original programming will cover a wide range of popular basketball and cultural topics, including game predictions, fashion, sneakers, and memorabilia. The content will be available throughout the regular season, NBA All-Star, the NBA Playoffs, and The Finals, bringing the latest NBA trends and news through various interactive formats, such as short videos and live streaming by celebrities and influencers, according to the press release.

NBA merchandise will be available on the company’s Taobao and Tmall sites.  Content will be available on Alibaba’s video streaming site youku as well through its UC browser.

Toby Xu, Vice President of Alibaba Group said: “the NBA is one of the most popular sports leagues in the world, with a sizable and passionate fan base in China. With this expanded partnership, we will fully leverage Alibaba’s ecosystem to create a unique digital experience and bring the NBA closer to fans and consumers in China.”

Integrated Platform Offerings 

The NBA’s deal with Alibaba falls under the company’s A100 program.  A100 brings together the entire Alibaba ecosystem to help brands digitize their operations in China.  It allows brands to tap into the Alibaba services that best fit their business operations, ranging from retail and payments to cloud computing and marketing, and more, according to Alibaba’s press release.

Alibaba's Deep Basketball Ties 

At Alibaba, the love of basketball runs deep.  Co-founder and Executive Vice Chairman Joseph Tsai is also an owner of The Brooklyn Nets and the WNBA’s New York Liberty, according to Reuters.[2]  The article also noted that Alibaba’s Tmall platform has been selling NBA merchandise since 2012.

Growth of Sports in China 

Between 2012 and 2016, the sports industry grew from 950 billion yuan to over 1.9 trillion yuan and is expected to grow to nearly 3.6 trillion yuan by 2022, according to Statista. A report by CNBC attributed the growth of interest in sports in China to the growth of digital platforms that allows the Chinese population to choose when and how to view sports.[3] 

China's Deep Ties to Basketball

We may think of basketball as a uniquely American game but it is deeply embedded in the Chinese culture.  It was in 1896, when Dr. James Naismith nailed up his first peach basket at his gymnasium in Springfield, Mass., that a government official named Piengiane introduced the game to China. It caught on immediately and has always been a deeply ingrained part of the culture, according to an NBA article.[4]  The article noted the export of Chinese basketball players such as Yao Ming and Jeremy Lin of “Linsanity” fame of furthering the popularity of the sport.

China - a Focus for the NBA

China has become a major emphasis for the NBA, according to a Forbes article which noted that some 640 million people in China watched some kind of NBA programming over the course of the 2017-2018 season.[5]  The NBA and Tencent, already in a digital partnership, entered a five-year expansion of their partnership in 2015[6].  Tencent will feature a record number of live NBA games and deliver enhanced original NBA programming and highlights, according to an NBA press release. NBA live games and content will be available for fans to access through various Tencent platforms and the company will offer viewers access to a full season of live and on-demand NBA games online and via mobile devices.

The NBA also has deals with other Chinese digital and internet companies such as Baidu and ByteDance, according to Forbes.

Summary

Sports viewership has experienced rapid growth.  Basketball has deep roots in the Chinese culture and is expected to be a source of growth for the NBA, based on their expectations.  As such, the NBA continues to pursue different avenues to grow interest and viewership in the country.  The NBA’s recent agreement with Alibaba is one example of their growth initiatives. 

Alibaba may benefit from increased exposure to NBA content and merchandise.  The agreement may help to increase the variety of content available on Alibaba’s platforms as well as the breadth of its merchandise offerings.

Find out more about Emerging Markets Internet & Ecommerce UCITS ETF (EMQQ)

As of 24th June 2019, the Emerging Markets Internet & Ecommerce UCITS ETF (EMQQ) held 7.79% of its weight in Alibaba. 

Read our EMQQ Whitepaper "The Great Confluence" here.

Article Date: 22nd May 2019. 

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