Mattel, Alibaba Partner to Develop Interactive, Educational Toys for the Chinese Market

Mattel (MAT) is teaming up with e-commerce giant Alibaba (BABA) to develop educational, interactive toys specifically for its Chinese market.

Mattel will market and sell its toys through Alibaba's platform Tmall.com while using the collaboration and the Chinese company's artificial intelligence lab to "develop new and innovative products designed to aid child development" through interactive learning, the companies said in a statement Tuesday morning.

Mattel and Alibaba, the biggest e-tailer worldwide based on gross merchandise volume, said they expect to start selling products in mid-2017.

The partnership comes after Mattel tapped Publicis Groupe agencies Mediavest Spark and DigitasLBi, dubbed "Team Mattel," to help advance technology for some of its core brands including Barbie, Fisher-Price, Hot Wheels and American Girl. Paris marketing firm Publicis Groupe touts itself on its "world-renowned creativity, best in class technology, digital and consulting expertise."

It is likely not a coincidence that as former Alphabet's (GOOGL) Google President of the Americas, Margaret Georgiadis takes over as CEO of Mattel, the company is driving growth in tech. Georgiadis replaced interim Mattel CEO Christopher Sinclair last week.

"Play has a tremendous impact on a child's cognitive, social and emotional growth," Georgiadis said in a statement. "By combining Mattel's unmatched expertise in childhood learning and development, with Alibaba's immense reach and unique consumer insights, our goal is to help parents in China raise children to be their personal best."

Although Sinclair led a noteworthy transformation of Barbie during his two-year term, adding various body shapes and skin tones to the doll, sales of the traditional doll fell in the company's recent quarter.

On Feb. 1, Mattel reported fourth quarter earnings of 52 cents a share, compared to Wall Street's expectations of 71 cents a share. The company's revenue declined 8% to $1.83 billion, with a 2% slip in Barbie sales amid a 7% drop in all North American revenue.

Meanwhile, Mattel released images of its new line of Wonder Woman dolls to be released in conjunction with the film's June 2 debut.

Morningstar analyst Jaime Katz told TheStreet that the launch of the new dolls shows Mattel supporting its relationship with Time Warner's (TWX) Warner Bros. Entertainment, as it holds the license to the DC Comics franchise.

"Mattel understands the importance of content driven product offerings, having watched rival Hasbro benefit from Marvel and Star Wars related product offerings," Katz said.

Hasbro (HAS) topped $5 billion in 2016 full-year revenue, a first for the toy company after retaining licensing deals with Walt Disney (DIS) . The company said its revenue from partner brands alone grew 31% in 2016 due primarily to Star Wars and Disney Princess.

Shares of Mattel are slightly higher at $25.67 in today's afternoon trading.

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