Alibaba turns heads as it joins Games sponsorship waltz

IOC President Thomas Bach (C) takes over the Olympic flag from Mayor of Pyeongchang Sim Jae-guk before handing it to Mayor of Beijing Chen Jining (R) during the closing ceremony of the Pyeongchang 2018 Winter Olympic Games. Games e-commerce sponsor Alibaba is trading cvarefully to avoid stumbling on to the turf of other sponsors. (Reuters)
Updated 26 February 2018
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Alibaba turns heads as it joins Games sponsorship waltz

PYEONGCHANG:The Olympic movement’s new Chinese global sponsor, e-commerce group Alibaba , came to the Pyeongchang Winter Games promising to revolutionize the experience for spectators, from buying tickets to souvenirs.
But other sponsors quickly reminded Alibaba that its revolution can’t happen if it steps on their turf.
Many of the services Alibaba wants to change, such as buying tickets online or shopping at the Games for Olympic-branded clothes and souvenirs, could involve trespassing on the territory of other IOC partners, experts and sponsors said.
Alibaba is the Olympic “E-Commerce Platform Services” provider under a deal worth hundreds of millions of dollars unveiled in 2016. But Visa Inc. is the Olympic payment technology partner and also has an e-commerce role at the Games.
“In our mind it’s very clear, consumer e-commerce is our category. Business to business is theirs,” said Visa’s Korea manager, Iain Jamieson, who attended the Pyeongchang Games.
“They’ll find their feet. It’s their first Games. They have the next Winter Olympics (in Beijing). I can understand that they want to make a strong statement up front,” he added.
When Beijing hosts the Winter Games in 2022, Alibaba will still have to pick its way around the dozen other top global sponsors of the International Olympic Committee (IOC), a dance whose rules are set out by the IOC’s sponsorship regulations.
Since the IOC created its top sponsor program in the 1980s, it has sliced and diced its sponsorship categories and granted strict marketing rights to different companies, ensuring sponsors do not compete with each other.
For example, Samsung Electronics, as the wireless communication equipment sponsor, can have nothing to do with cameras at the Games because rival Panasonic Corp. is the global Olympic camera sponsor.
In a sign of its intentions, Alibaba set up a marketing showroom at the Games to demonstrate potential future uses of its technology, such as using facial recognition to help personalize the shopping experience.
Alibaba CEO Daniel Zhang said in an interview in Pyeongchang that the company was also looking to improve how merchandise is sold during the Games.
“Why do people have to stand in line for such a long time?” said. He described a scenario where people can see items on their phone, order them and collect them at the Olympic park.
Zhang said Alibaba was looking at which specific areas to focus on with its IOC deal and was also working closely with the Beijing Games organizers.
“We are talking with the IOC and Beijing and other partners to brainstorm. Pretty soon we’ll try to narrow down to very concrete ideas,” he added.
Alibaba said it had no problem working with other sponsors, saying the Games enabled it to deepen its relationships with other large companies.
Alibaba has said it is in talks with other top sponsors Procter & Gamble Co, Coca-Cola Co, Samsung and Intel Corp. to find opportunities to work together in the short and long term.
An executive familiar with Coca-Cola’s thinking said it saw no conflict with Alibaba’s current e-commerce deal and that it would still leave room for Coke to do a marketing deal around the Olympics with another e-commerce firm.
Alibaba also needs to be mindful of French technology consulting company Atos SE.
Alibaba is also the cloud services provider of the Olympics while Atos is the IT partner. The French firm’s Olympic website also makes reference to the cloud.
Alibaba said in a statement before the Games that Atos was “obliged to remove this communication on their website.”
Atos said in a statement that it “is allowed to refer to cloud as it relates to the provision of services that Atos provides for the Olympic Games.”
Shaun Whatling, chief executive of sponsorship consultancy Redmandarin, which has worked with IOC sponsors, said Atos as an existing sponsor should have managed its sponsorship category more actively to avoid Alibaba taking over all cloud services. Atos added that top sponsors are supposed to work with one another and that it had started talks with Alibaba “to evaluate future collaborations.”
IOC executive Christian Voigt, who oversees the top sponsorship program, told Reuters that Atos was not a cloud services partner and it instead looked after integration of IT systems around the Olympic sites.
“Of course, the use of the cloud is possible for others, it’s just that the marketing around it and focus for the Olympic movement is just Alibaba,” Voigt said.
“Our categories are pretty clearly crafted. We have no overlap and we are quite careful in the selection process.”
Alibaba can work well with the other sponsors and still look to steal the spotlight away from them.
“Alibaba’s made a strong start as an IOC partner. It’s understood the need to use (the Olympics) as a platform for a big vision, which many other partners fail to do,” said Whatling of Redmandarin.


WEEKLY ENERGY RECAP: China distracts from Strait of Hormuz

In this May 5, 2019 photo issued by Karatzas Images, showing the British oil tanker Stena Impero at unknown location, which is believed to have been captured by Iran. (AP)
Updated 28 min 39 sec ago
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WEEKLY ENERGY RECAP: China distracts from Strait of Hormuz

  • China’s economy slowed to the weakest pace since quarterly data began in 1992 amid the ongoing trade standoff with the US, while monthly indicators provided signs of some stabilization emerging

RIYADH: Crude oil prices deteriorated despite rising tensions in the Arabian Gulf toward the end of the week. Brent crude prices dropped to $62.47 and WTI dropped to $55.63 per barrel.
WTI recorded its biggest weekly decline in seven weeks, having fallen sharply earlier in the week on hopes that the situation in the Gulf would improve along with parallel worries about global demand. At the same time, a major storm hurt output in the Gulf of Mexico, where production was down by almost a fifth in its wake.
We saw a continuation of the theme of previous weeks where the oil price largely ignored events in and around the Strait of Hormuz, even after Iran seized two British-flagged oil tankers.
Instead, the market reacted to Iran’s potential nuclear deal with the US that would include permanent enhanced nuclear inspections in return for the lifting of sanctions.
China’s crude oil throughput rose to a record in June, up 7.7 percent from a year earlier, following the start-up of two large new refineries. Crude oil processing reached 13.07 million bpd, beating the previous record in April of 12.68 million bpd.
Despite strong oil demand from China, oil prices slipped after Beijing posted its slowest quarterly economic growth in at least 27 years, reinforcing concerns about demand in the world’s largest crude oil importer.
China’s economy slowed to the weakest pace since quarterly data began in 1992 amid the ongoing trade standoff with the US, while monthly indicators provided signs of some stabilization emerging.
The International Energy Agency pounced on that news and published a shaky oil demand outlook and reduced its 2019 oil demand forecast to 1.1 million bpd, down from its initial forecast of 1.5 million bpd, due to the slowing global economy and the US.-China trade war.
Yet the economic impact of the US-China trade argument is not an oil market-reflective. Surprisingly, some economists suggest that the trade dispute could spark a global recession, sending incremental oil demand lower. This has caused growing concern about supply and poor economic growth that has pushed oil prices lower, based purely on sentiment.
Arabian Gulf crude grades have further strengthened backed by demand uptick from North Asian refineries.
Norway’s crude oil production slipped to the lowest in three decades to 1.38 million bpd in April from 1.387 million bpd in March and 1.531 million bpd a year ago.

Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter:@faisalfaeq