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Photo/Wu Fan(NBD)

Feb. 15 (NBD) -- Chinese e-commerce conglomerate Alibaba Group announced Thursday its online retail unit Taobao has acquired an 8 percent stake in video streaming platform Bilibili (Nasdaq:BILI).

Shares of Bilibili rose by 3.96 percent to close at 18.92 U.S. dollars in Thursday trading.

Early in December last year, the two parties have forged collaboration in fields including commercialization of intellectual property (IP) assets.

Taobao has been introducing a raft of content creators who have millions of followers from Bilibili, and offering them custom plans for shop operation on its platform which helps those creators partner with other brands and develop derivatives.

Chen Rui, CEO of Bilibili believes the new deal will enable the company to present creators' innovative and quality contents by leveraging Taobao's huge platform.

It is noteworthy that Bilibili also acquired capital from Alibaba Group's rival Tencent. Last October, Tencent increased holdings in Bilibili to around 12.3 percent with an investment of 317.6 million U.S. dollars in cash.

Known as China's most popular website for streaming anime and games videos among Generation Z, Bilibili rang the bell in Nasdaq Stock Market in late March of 2018.

The platform maintained loss-making in the first three quarters of last year. The financial results show that Bilibili generated 2.97 billion yuan (439.2 million U.S. dollars) in revenue during the quarters, a year-over-year surge of 71.4 percent, but its net loss registered 374.20 million yuan (55.3 million U.S. dollars), jumping 183 percent compared to the same period of 2017.

The mobile game segment brought considerable revenue totaling 2.22 billion yuan (328.3 million U.S. dollars) to the company, which indicates Bilibili's simplistic expanding path.

Bilibili CFO Fan Xin once mentioned that the proportion of the revenue from game business will decrease to 50 percent in the coming three to five years.

As a result, the platform is diversifying growth driver in a bid to turn profitable.

The partnership with Tencent to diversify IPs can be considered as Bilibili's deployment in the upstream of the industrial chain and by teaming with Taobao, the company will tap the downstream of the chain and perfect the content ecosystem.

Taobao's users with an appetite for animation, comic and games (ACG) number over 100 million, more than 50 percent of which are post-1995s and post-2000s generation. Besides, sales in the ACG market on Taobao grew by 90 percent during the "Double 12" shopping festival of last year.

As content creators are the core resources for Bilibili, providing them a new way to gain earnings on Taobao is expected to make them keep loyalty to the ACG platform.

For Alibaba Group, the tie-up will lead more traffic to its online marketplace. As of the third quarter of 2018, Bilibili's average monthly active users reached 92.7 million.


Email: zhanglingxiao@nbd.com.cn

Editor: Zhang Lingxiao