Alibaba looks to become dominant digital advertising player in China with $1.43bn investment

Chinese tech giant Alibaba has signalled its intent to move deeper into the digital advertising space by purchasing a minority stake in Shanghai-based Focus Media, for US$1.43 billion.

Focus has digital advertising screens in 300 Chinese cities

The move will give the company nearly 7 per cent of Focus Media, which has digital advertising screens on streets, in subways and in elevators across 300 Chinese cities.

Those assets are said to reach 200 million Chinese consumers every day. And Alibaba admitted that it planned to buy another 5 per cent of Focus within the next year, as part of its “new retail strategy”.

The strategy will integrate “the best aspects of online and offline commerce to make shopping more engaging and convenient for consumers, while offering enhanced marketing tools and more-detailed consumer analytics to merchants” – claimed Alibaba.

“By partnering with Focus Media, which has set a medium-term goal of having five million terminals in 500 Chinese cities and reaching 500 million middle-class consumers, Alibaba can offer new digital channels through which the brands selling on its e-commerce platforms can connect with these consumers and their rising spending power,” said Alibaba in a statement.

The firm claimed it would be “leveraging its analytics collected from its more than 500 million users to help brands better understand and reach Chinese consumers”, adding: “The use of consumer data allows brands to identify, target, reach and retain their customers across Alibaba’s entire ecosystem of e-commerce and media properties.

“This approach to digital marketing, which offers more advanced and reliable marketing tools to brands than traditional marketing, has always been at the core.”


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