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Alibaba Group Holding Ltd’s (NYSE:BABA) 8% Acquisition Of Billibili Inc. (NASDAQ:BILI) Aims At Increasing Their Content Drive E-Commerce

On February 14, 2019, Alibaba Group Holding Ltd (NYSE:BABA) indicated that they had acquired 8% stake in Billibili Inc. (NASDAQ:BILI) with the aim of leveraging the platform to encourage buying of products from the e-commerce platform.

Bilibili is a Chinese video streaming platform that has over 92 million active users per month. Founded in 2009 the company got listed by NASDAQ in March 2018.

Acquisition through Taobao

The announcement indicates that Alibaba Group did the acquisition through its retail e-commerce platform Taobao. The company acquired shares from Bilibili’s long term shareholders last year which they boosted this month with the acquisition of shares on the secondary market to bring the total shares purchased to 24 million. However, transaction details have not been disclosed.

The move follows an agreement that the two sides announced in December when they agreed to collaborate in “content-driven e-commerce and commercialization of the intellectual property assets of Bilibili.” Bilibili has the capability of encouraging users to consume more which is a great commercial opportunity for Alibaba which is the largest channel in China.

Unlocking the potential of Bilibili

Taobao president and Vice president of Alibaba, Jiang Fan, stated that they believe the cooperation between the two companies will unleash the commercial potential of Bilibili as well as bring more creativity of the company to the world.

In December last year, Bilibili CEO and chairman, Chen Rui said that the company was looking forward to jointly work with Taobao as they seek to fulfill the remarkable consumption and entertainment needs of its users in China. Bilibili has maintained a competitive edge in the market owing to the Millennial-based content that makes it attractive to tech giants striving to keep up with changing preferences in Chinese digital natives who are becoming economically independent each day.

The company had $109.8 million in gaming revenue which accounted to over 70% of its revenue in Q3. Alibaba’s rival Tencent has an investment in Bilibili an in October last year they increased the investment by $317.6 million to bring their stake to 12%.

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