As it branches further out into the entertainment sector, Alibaba Group Holding Ltd. will be teaming up with China’s counterpart to Pixar, Light Chaser Animation Studio.
The e-commerce giant's film unit, Alibaba Pictures Group Ltd., signed a deal to become the main distributor for the upcoming movie "Little Door Gods" from the Beijing-based startup created by Gary Wang, founder of Chinese online video site Tudou, according to the Wall Street Journal.
The movie, Light Chaser's first feature-length film, tells the story about guardian spirits inspired by Chinese folklore and is slated for release in Chinese cinemas on Jan. 1 next year.
Wang said that the total budget for "Little Door Gods," including production, distribution and marketing, is around $25 million--a pittance compared to the $1.57 billion raised by Alibaba Pictures after issuing new shares in June.
"We talked to pretty much everybody, but eventually we decided to work with Alibaba Pictures," Wang told the Wall Street Journal on Monday, citing Alibaba's robust online and offline distribution and ticket sales channels.
But while Alibaba Pictures will be investing in the movie, the company will not be investing in the studio, he added.
The investment follows Alibaba's recent attempts to tap into the booming film industry in China, the world's second-largest box office next to the U.S.
In the past year, Alibaba purchased a controlling stake in film studio ChinaVision Media Group for $800 million and renamed it Alibaba Pictures. The company also offers online movie ticketing services through its smartphone apps and runs the movie crowdfunding platform Yulebao.
Light Chaser is one of China's most creative animation studios, said an Alibaba Pictures spokesperson, adding that the deal is also the first time Alibaba has invested in an animation project.
The audience is becoming more receptive to made-in-China animation movies about China, Wang said.
"The market is already there. The market is hungry for good quality production," Wang added.
In 2014, Light Chaser raised $20 million in a funding round from venture capital firms GGV Capital and Chengwei Capital. The company currently has around 200 employees, including people who previously worked for major U.S. studios such as Pixar and Industrial Light & Magic.