Alibaba buys majority stake in Chinese online marketing giant AdChina
Wed 14 Jan 2015
China’s ecommerce powerhouse Alibaba has today announced that it has bought a majority stake in AdChina, the country’s largest online marketing platform – a move aimed at cementing its advertising business.
Alibaba has not disclosed the size of the deal nor the stake which it will hold in AdChina. The Shanghai-based company, founded in 2007, produced $51mn in sales revenue in 2011 and filed for a $100mn initial public offering (IPO) in February 2012, pulling the listing the following year.
This deal marks the first of its kind for Alibaba in 2015, after the group spent over $6.2bn on acquisitions last year, as well as listing $25bn on the New York stock exchange (NYSE).
The investment in AdChina hopes to bolster the company’s online and mobile advertising division, Alimama which currently accounts for more than half of Alibaba’s revenue, according to iResearch figures. At the end of 2013, AdChina was incorporated in over 60,000 mobile apps and reached more than 80 per cent of China’s mobile internet users.
The two companies will develop marketing strategies over Alibaba ecommerce sites, including retail platform Tmall.com and consumer-to-consumer marketplace Taobao, which holds over 90 per cent of the Chinese market with more than 800 million product listings and approximately 500 million registered users.
“The rapid rise and development of the e-commerce industry in China has made the relationship between e-commerce and marketing ever more linked. AdChina’s data marketing platform and Alimama’s existing online marketing business are very complementary,” said Wang Hua, general manager at Alimama.
He added that the next three to five years will be crucial in achieving “a world-class marketing and data-driven platform” to support ecommerce merchants across the Alibaba “ecosystem.”
Jack Ma, founder of Alibaba, has expressed his desire to expand his online giant beyond retail, buying a 50 per cent share in a Chinese football team in June last year, and this week announcing an entertainment deal with Hong Kong filmmaker Wong Kar-wai.