Yu Yongfu to take over as CEO of Alibaba Pictures

Technology entrepreneur and financier Yu Yongfu is to take over as CEO of Alibaba Pictures, the film arm of Chinese e-commerce giant Alibaba.

He replaces Zhang Qiang, who remains a board level director and is re-designated as co-president, according to a company statement.

Yu, who is 40, joined Alibaba in 2014 after the e-commerce titan acquired the mobile internet and software service provider UCWeb, now Alibaba’s browser for smart phones, which he had headed.

The new head, who joined Alibaba Pictures as a non-executive director in August, said he plans to reshape the filmmaker to be an entity with a “Goldman Sachs-style” organisational culture, and a flat operational hierarchy, according to his open letter to company employees following the appointment.

Prior to joining Alibaba, Yu spent six years from 2001 to 2006 as a vice president and associate with Legend Capital, the venture capital arm of Legend Holdings.

Ali Pictures, the only publicly listed company under Alibaba’s entertainment business, has been undergoing a major overhaul, including the incorporation of online ticketing platform Tao Piao Piao and a recent tie-up with Hollywood’s top-grossing Steven Spielberg’s Amblin Partners.

“Dramatic changes have been taking place across the movie industry landscape. Following the last three years of exponential growth, we are seeing a wave of consolidation,” Yu wrote.

“Next year, there will be a large number of film companies opting to, or being forced to, withdraw from the market.”

Yu noted that Ali Pictures’ goal was not to be a “traditional” film company, but to get more “innovative.” He called on staff to uphold “partnership” ethos that will give one incentives to work harder.

Ali Pictures has expanded its footprint from filmmaking to cinemas and movie ticketing over the last year, splashing out 100 million yuan on an 80 per cent stake in a Hangzhou theatre in August.

In October, it partnered with Spielberg’s Amblin on co-production and the financing of films.

Among the best-known blockbusters it has invested in are Mission: Impossible - Rogue Nation, and Teenage Mutant Ninja Turtles: Out of the Shadows.

The filmmaker, which counts celebrity actress Zhao Wei as one of its shareholders, recorded a loss of 466 million yuan for the six months ended June 30, while its revenue surged more than tenfold to 257 million yuan for the same period.

Ali Pictures shares declined 2.05 per cent to HK$1.43 on Tuesday. They have fallen 25 per cent over the last 12 months.

Alibaba owns the South China Morning Post.