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How billionaire Jack Ma is using sports data to change the way people shop

Bloomberg/ 06 Dec 18 | 09:02 PM

Think of it as “Moneyball" for e-commerce.

Just as professional sports teams have used reams of data to maximize performance, Chinese billionaire Jack Ma is turning to analytics to get the most out of fans and change the way athletic events are managed and people shop for gear.

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After getting its start with a service allowing users to track their workouts, a unit of Ma’s Alibaba Group Holding Ltd. is now moving onto organized sports. Using marathons as a guinea pig, it’s scooping up broadcast rights and collecting information on participants and viewers to sell them everything from running shoes to health insurance. Fans watching the event on the company’s Youku streaming service can even send virtual gifts and tips to their favorite runners.

The strategy will then be replicated to other fields, including e-sports, soccer and basketball, as Alisports carves a share of a Chinese sports industry the government estimates could be worth 5 trillion yuan ($728 billion) by 2025.

“We are a platform that records big data on sports," Zhang Dazhong, chief executive officer of Alisports, said in an interview. “Viewers watching sports on our sites now are directly connected with the e-commerce stores, something that couldn’t happen in the past."

Zhang’s goal is to expand the three-year-old business to more than 100 million users by November next year, triple the current level. Alisports has brought in cash to help reach that target, raising more than 1.2 billion yuan in a series A financing round in April at a valuation of more than 8 billion yuan.

That’s why Zhang is focusing on connecting back-end data with other units in Alibaba’s sprawling empire. That’s become a selling point for the Alisports ad business when it pitches to brands like Adidas.

“The extra data will provide additional context into users allowing them to provide deeper, more tailored personalized profiles for users, which obviously helps every aspect of their business’s profitability," said Tanner. “So in short, I think it is a smart move."

A key difference for sports viewing in China is that many more watch on computers or mobile devices compared with markets such as the US, where viewing on a TV is far more common. That means the audience can be more interactive with the event and advertising. About 600 million people in China watched videos online as of June, roughly 95 percent of them via mobile devices, according to the China Internet Network Information Center.

With more precise targeting, brands can also save on their spending, which in turn can be distributed back to consumers in the form of discounts and coupons to drive sales, Zhang said.

“When you watched sports events on the TV in the past, as a viewer you wouldn’t know how to buy products you liked from the advertisement," he said. “Now viewers can go straight to Adidas’s store on Tmall as they watch the games on our site."

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