Soon, Chinese Pokémon fans who grew up with the brand’s wildly popular games and animated TV shows will be able to buy legitimate T-shirts, cosmetic products, stationery, and other merchandise on Alibaba’s online marketplace.
Alibaba Pictures, the company’s film and television division, recently struck a deal with The Pokémon Company for the franchising of popular Pokémon merchandise, the Chinese company said in a statement to Sixth Tone. To Alibaba Pictures, the deal is yet another expansion of its merchandising rights portfolio, which already contains several international brands.
The partnership kicked off on Thursday, June 1, when Alibaba Pictures launched a Pokémon-themed exhibition — featuring an 8.5-meter-tall inflatable Pikachu — in Hangzhou, the city in the eastern province of Zhejiang where Alibaba is headquartered.
Dong Fang, a director at Alibaba Pictures, told The Paper, Sixth Tone’s sister publication, that Tmall, one of Alibaba’s e-commerce bazaars, will sell the rights to produce goods under Pokémon’s name to shops on its platform. Alibaba Pictures and The Pokémon Company will each take a cut of the sales.
Created in 1996, Pokémon has cultivated a fan base around the world, including in China, where homegrown video games and cartoons have failed to attract the attention of local audiences. Fans were frustrated earlier this year when Chinese authorities said they would not license “Pokémon Go,” the hit augmented-reality smartphone game, in the country due to potential security risks.
“Pokémon is in an ‘I don’t know what to do’ situation,” which has made the Japanese brand “gravitate toward big companies like Alibaba,” Shaun Rein, founder of China Market Research, a Shanghai-based strategic market intelligence firm, told Sixth Tone.
Without legal expertise, foreign companies often fall victim to piracy in China. By teaming up with Alibaba Pictures, The Pokémon Company aims to start profiting from its long-established reputation in the country, the company’s corporate officer Susumu Fukunaga said according to Alibaba Pictures’ statement.
Alibaba Pictures estimated that the total sales of licensed Pokémon products on Tmall will surpass 200 million yuan ($29.4 million) in 2017.
However, the move might be “dangerous” for Pokémon because collaborating with Alibaba means they will give away the power over quality control in China, Rein said. If manufacturers produce poor-quality products, consumers will naturally associate the bad quality with Pokémon, he added.
Whether the strategy will bode well for Alibaba Pictures’ overall business development also remains a question. The deal is the film company’s latest expansion into licensing after suffering economic losses amounting to 976 million yuan last year. Alibaba Pictures has established partnerships with several foreign companies such as the classic arcade game “Pac-Man” and the American animated television series “The Powerpuff Girls” to sell licensed merchandise on its e-commerce platforms.
For a company whose core business is movie production and distribution, tapping into licensing might prove distracting, Rein said.
But Jeffrey Towson, a professor of investment at Peking University, regards the move as part of Alibaba’s strategy to build an integrated online and offline marketing capability across the entire entertainment value chain.
“They have Tmall, [e-commerce platform] Taobao, [video-platform] Youku, and so on, and they can push not just movies, but also merchandise, online streaming, and other derivative products,” Towson told Sixth Tone. The movie arm “is becoming a data-driven movie studio with a unique suite of integrated marketing capabilities,” he added. “It’s basically what you would get if Amazon and Walt Disney had a baby.”
With all the data collected from consumers across Alibaba’s myriad online services, the e-commerce giant is becoming the “must-have partner” to content companies in China and around the world who hope to succeed in the Chinese entertainment industry, said Towson.
Correction: This article previously said Alibaba Pictures estimates total sales of Pokémon products will surpass 20 million yuan in 2017. The company’s estimate is 200 million yuan.
Editor: Kevin Schoenmakers.
(Header image: A giant inflatable Pikachu is on display at a shopping mall in Hangzhou, Zhejiang province, June 1, 2017. Wang Chuan/VCG)