Alibaba invests $1.43 billion in Focus Media stake acquisition
The acquisition will strengthen the online retailer’s New Retail strategy, which seeks to integrate online and offline retail to create a smooth and seamless purchase experience for consumers.
Alibaba has acquired a minority stake worth $1.43 billion in Focus Media, the Chinese digital advertising agency. According to media reports, the Chinese tech giant also plans to acquire a further 5% stake in the company within the coming year. The acquisition will give Alibaba a 6.62 5 share in Shanghai based company which is believed to have a 200 million customer reach.
Alibaba also plans to buy a 10% stake in an entity which controls 23.34% of Focus Media. New Retail Strategic Opportunities Fund, which is designated as a “non-consolidated, related party of Alibaba”, will also acquire a 1.37% interest in Focus Media, bringing Alibaba’s total investment to $2.23 billion and gives the company a 10.34% stake.
According to reports Focus Media will use this investment to extend its reach to include 5 million stations in 500 Chinese cities, with an aim to connect to 500 million consumers. On the other hand, for Alibaba, this acquisition will strengthen the online retailer’s New Retail strategy, which seeks to integrate online and offline retail to create a smooth and seamless purchase experience for consumers.
The deal will also allow Alibaba’s digital marketing platform Alimama to collaborate with Focus Media to offer brands new digital avenues to promote and build their business. In addition to this, it will fortify Alibaba’s consumer analytic tool, Uni Marketing, which helps brands to identify, target, reach and retain their consumers across all Alibaba’s network of e-commerce and media sites.
Alibaba and Focus Media will also synergise to create ‘New Marketing’ which will offer brands a way to combine offline media, digital marketing and New Retail.
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