Alibaba is expanding its Chinese empire with the acquisition of the video-sharing site Youku Tudou for $3.7bn in an all-cash deal.
Often referred to as the ‘Chinese YouTube’, Youku Tudou is the largest Chinese-language video site on the web with 580m online video users each month and will now join fall under the Alibaba umbrella.
Until this acquisition, Alibaba owned an 18.3pc share in Youku with the latter launching its IPO back in December 2010 at $12.80 per share.
According to a joint statement issued by the companies, the deal will see the two merge sometime in the first quarter of 2016 with Youku’s CEO, Victor Koo, expected to stay on as its head under Alibaba.
“We believe this combination with Alibaba maximises value for Youku Tudou shareholders and significantly benefits our customers, users and team,” said Koo. “We are eager to work with Alibaba to grow our multiscreen entertainment and media ecosystem.”
He continued: “We are confident that we will strengthen our market position and further accelerate our growth through the integration of our advertising and consumer businesses with Alibaba’s platform and Alipay services. With Alibaba’s support, Youku Tudou’s future as the leading multiscreen entertainment and media platform in China has been firmly secured.”
The news of Alibaba’s expansion comes in the face of criticism from within China over its dominance over smaller retailers in the build up to the country’s, and the world’s, largest online shopping day, Singles Day on 11 November.
Alibaba’s next biggest rival, JD.com, has claimed that Alibaba’s Tmall is forcing retailers to only promote its sales over everyone else’s.
However, Alibaba has come out to say that these claims are merely the result of its rivals “panicking because they’re losing”.
Alibaba cup image via Charles Chan/Flickr