Chinese eCommerce behemoth Alibaba is breaking into the film industry – sort of. The company recently announced a new crowdsourcing and funding initiative called Yu Le Bao, where investors can have a say in who should direct and star in projects.
Alibaba has chosen the ideal time to get into the movie business. Thanks to its upcoming IPO, the company has garnered global attention. Not to mention that China has the fastest growing film industry in the world; last year saw a 27% boom in box office sales. Current Yu Le Bao projects include a social networking game and a number of films, including an adaptation of the novel ‘Wolf Totem’ by Lu Xun.
The total investment target is RMB 73 million, with funds going to insurance Guohua insurance and wealth management products, before ultimately being invested in the ‘cultural industry’. Alibaba outlined the difference between this new platform and traditional crowdfunding models, in a post on Weibo: “Crowdfunding projects can’t offer returns on equity or investment, and the people behind those projects can’t promise supporters any kind of profits… This is innately different from Yu Le Bao’s platform, which offers anticipated capital gains on insurance and wealth management products.”
Alibaba has spent a whopping $2.7 billion on enriching its media and technology proposition ahead of its IPO. This week, Alibaba stated that it will be investing $692 million in Intime Retail, a leading Chinese department store operator, in order to improve the quality of its shopping experience and establish more of an in-store, off-line presence.
This costly acquisition might also help Alibaba get one over on internet rivals Tencent and Baidu. The three companies are in fierce competition to secure as much of China’s burgeoning online market, and each firm is partnering with smaller organisations to strengthen their respective consumer offerings.