Alibaba’s online ticketing business completes 1.7 billion yuan funding
Alibaba Pictures Group, the film entertainment arm of Chinese e-commerce giant Alibaba Group, is taking a further step into the booming movie market on the mainland by raising 1.7 billion yuan (HK$2 billion) for its online ticketing service Taobao Movie, the group announced on Sunday.
“[The investment will] sustain its [Taobao Movie] operations and further strengthen its market position in a competitive and fast developing business segment,” said Shao Xiaofeng, chairman of Alibaba Picture Group in a statement.
Led by major Chinese venture capital firm CDH Investments, Ant Financial Services Group, which spun off from Alibaba and Chinese internet portal Sina.com, the investment raised the valuation of Taobao Movie to 13.7 billion yuan (HK$16.3 billion).
The group also aimed at incorporating industry resources by including investment from major Chinese production and distribution companies such as Hehe Pictures, BONA Film, and Huace Media.
The funding round is the latest of a series of expansion moves of the group. Last week it made a 1 billion yuan (HK$1.19 billion) investment into Dadi Cinema, the second-largest cinema investment and management company after Wanda Cinemas from Chinese property conglomerate Wanda Group.
“The O2O Platform is an integral part of the group’s promotion and distribution business,” Shao said. O2O refers to “online to offline” internet services such as group-buying and online ticketing.
According to the State Administration of Press, Publication, Radio, Film and Television, the mainland Chinese box office surpassed 44 billion yuan last year, up nearly 50 per cent from 2014.
Online ticketing, in which users buy tickets and choose seats on their computers or smartphones, has become the dominant way of purchasing tickets in the country. Chinese research firm Analysis said in a report that more than 70 per cent of movies tickets in China were sold online in 2015.
Taobao movie will face fierce competition as the fourth player in the online ticketing market with less than 10 per cent market share for the fourth quarter last year, according to Analysis.
The leading ticketing platform Maoyan Movie, a spin-off from Chinese group-buying giant Meituan-Dianping, has over 25 per cent market share. The second and third players, Weipiao and Nuomi, which were backed by internet giant Tencent and Baidu respectively, each controls more than 15 per cent.
Founded in 2014 after Alibaba spent more than HK$6.2 billion to buy 60 per cent share of entertainment company China Vision Media Group and renamed it Alibaba Picture Group,the company has invested in a wide range of movie businesses from production to distribution.
It invested in Hollywood production Mission: Impossible – Rogue Nation last year, acquired Chinese ticketing technology provider Guangdong Yueke Software Engineering last June, and bought its parent company’s online ticketing business Taobao Movie and entertainment project crowd-funding platform Yulebao last November.
Alibaba is the owner of South China Morning Post.