Blog Coverage Alibaba Expands its Presence in the Entertainment Business with Acquisition of Chinese Online Ticketing Platform Damai

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LONDON, UK / ACCESSWIRE / March 22, 2017 / Active Wall St. blog coverage looks at the headline from China’s Alibaba Group Holding Ltd (NYSE: BABA) as the Company announced on March 21, 2017, that the Company has acquired online ticketing platform Damai.cn. This acquisition is Alibaba’s strategy to expand its footprint in the entertainment business. Register with us now for your free membership and blog access at:

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The acquisition

Beijing, China based Damai is an ecommerce platform that offer tickets to concerts, sporting events, live theatre, movies, and other events. Damai has presence across 330 cities worldwide with 46 branches and it has handled ticket booking for more than 1.8 million concerts and sports events.

Alibaba made the announcement via a post on its Sina Weibo account. Alibaba had previously invested in Damai in 2014 by acquiring 32% stake in the Company and with the current acquisition Alibaba has acquired complete 100% stake in Damai. The financial details and other terms of the acquisition were not disclosed by both Companies. Alibaba Pictures already has an online ticketing platform – Tao Piao Piao, the flagship ticketing service of its film studio arm, Alibaba Pictures Group. The Company has not clarified if post the merger Damai will be merged with Tao Piao Piao or any other business. If the consolidation of Damai and Tao Piao Piao’s business does happen, Alibaba will manage to save a lot in terms of joint synergies.

Commenting on the acquisition, Yu Yongfu, Chairman and CEO of Alibaba Pictures Group and Head of Alibaba’s Digital Entertainment Division said:

“Damai.cn will be a powerful platform to distribute our media content as well as expand our user reach and engagement. There will be extensive collaboration opportunities with our other entertainment assets including Alibaba Music, Alibaba Pictures and Youku.”

Damai responded via a separate post saying that it was happy to join the “Alibaba family”.

Acquisitions – a planned business strategy

Alibaba has used mergers and acquisition as a business strategy for expansion. The Company has been making investments not only in China and US but also in markets like India, Malaysia, etc. With the acquisition of Damai, it is diversifying outside of its online retail business into the entertainment business. Alibaba’s entertainment business vertical already has presence in the mobile Internet browsing, video, and music streaming. Alibaba has ambitious plans to expand its entertainment business to cover fan economy, film production and distribution. The Company has started the expansion with an acquisition on online ticketing in the domestic market; this experience will surely help the Company to cover other geographies at a later date.

A few days back, on March 17, 2017, Alibaba is said to be planning an investment of over 1 billion yuan (approximately $145 million) by gaining stake in some mobile gaming Companies to expand its mobile game distribution globally. On March 14, 2017, Alibaba revealed its plans to set up a regional distribution hub in Malaysia to cater to the business opportunities in the region. Alibaba increased its stake in the Indian arm of online payments Company Paytm with a $177 million investment in early March 2017.

Stock Performance

On Tuesday, March 21, 2017, the stock closed the trading session at $105.09, falling 2.01% from its previous closing price of $107.25. A total volume of 13.86 million shares have exchanged hands, which was higher than the 3-month average volume of 9.47 million shares. Alibaba Group Holding’s stock price surged 18.52% in the last three months and 34.54% in the previous twelve months. Furthermore, on a year to date basis, the stock soared 19.68%. Shares of the company have a PE ratio of 48.47.

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