On Monday, CoinDesk reported the shopping app Lolli was offering bitcoin rewards to U.S.-based Alibaba shoppers for Singles Day.
Alibaba Group representatives have since denied the “partnership” touted by Lolli CEO Alex Adelman. The fissure revealed a common misconception in the blockchain industry.
“One of Alibaba.com’s contractors hired a subcontractor who brokered an affiliate marketing program with Lolli. This was done without the knowledge of Alibaba.com,” an Alibaba spokesperson told CoinDesk. “Alibaba.com’s contractor is terminating the relationship with the subcontractor who was working with Lolli. As a result, Lolli should no longer promote or bring traffic to Alibaba.com.”
He added that Lolli “never had the right to claim a partnership with Alibaba.com or imply one with Alibaba Group.”
In response, Adelman said, “There has to be an integration for us to send sales to someone’s site.”
However inflated the promotion of this Singles Day campaign may have been, Adelman’s team wasn’t completely off-base. Contractual agreements seen by CoinDesk appeared to permit the usage of “Alibaba related keywords” in online materials. The startup had already been processing bitcoin rewards for AliExpress shoppers since May 2019.
According to Lolli’s head of communications, Aubrey Strobel, Alibaba.com itself trialed Lolli’s services for 24 hours during the Singles Day campaign, then deactivated “the partnership” after publicity drew attention to the trial.
Subsequent coverage of the announcement misrepresented the deal as Alibaba accepting bitcoin directly. As CoinDesk reported on Friday, Chinese regulators appear to be gearing up for a renewed crackdown on cryptocurrency exchange-related services.
“It seems as though there was a miscommunication on Alibaba’s end and while that’s unfortunate, we look forward to the possibility of working with Alibaba.com again in the future,” Strobel said in a statement. “In the interim, Alibaba Group’s AliExpress is still live on Lolli.”
As it stands, the root cause of the mixed messaging is unclear.
Blockchain companies often claim to have “partnerships” with brands when they really have an indirect affiliate contract or are merely working on a proof-of-concept. On the other hand, some paperwork with representatives from both parties had already been finalized and payments to shoppers were processed before the now-controversial announcement.
This also underscores the challenge of defining what a “partnership” really means at the intersection of e-commerce and crypto.
What the Lolli team saw as expanding on an existing client relationship during a mainstream holiday campaign by the flagship brand, Alibaba Group viewed as a private and “transactional” deal mediated by third parties, according to the Alibaba spokesperson. From Alibaba’s perspective, this was not an official partnership.
The spokesperson claimed there was no direct contact between Lolli and the Alibaba Group, despite the AliExpress rewards processed. The spokesperson added that Alibaba Group does not work with any bitcoin-related companies.
Alibaba building image via Shutterstock