Cinema fans attend the showing of a film starring Jiang Wen in Beijing. (Photo : Getty Images)
Alibaba Pictures Group's investment in an online ticketing firm has paid off after its revenue increased by more 1,000 percent in the first half of the year, as the company vowed to raise film product at home and abroad and enhanced its e-commerce sales.
The South China Morning Post reported that the company attributes the boost in revenue to last year's acquisition of Yueke Software Engineering, a Chinese cinema-ticketing firm, which earned the company 257.3 million yuan in the first six months, compared with 22.9 million yuan in the same period last year.
"Alibaba Pictures' Internet-based promotion and distribution business is well positioned to benefit from the overall box-office growth and the increasing adoption of online film ticketing in China," the company said in its announcement.
According to the company, online platforms currently sell more than 70 per cent of all domestic film tickets.
But despite the increase in revenue, the company still incurred a net loss of 465.7 million yuan, three times higher than the same period last year. The company attributed the loss to the high marketing expenses used to subsidize ticket users of Tao Piao Piao, the company's film ticket, in its effort to gain market share.
"Using this strategy, Tao Piao Piao's market share has grown sharply and is now one of China's leading online film ticketing platforms," Alibaba Pictures said.
The company claimed that 95 percent of the country's box office was covered by Tao Piao Piao.
In May, investors that included CDH Investments, Ant Financial Services Group and Sina.com, poured in about 1.7 billion yuan in funding for Tao Piao Piao, in exchange for a 12.4 percent stake.
Following the establishment of flagship stores on Tmall and after licensing several products for sale, the company said it will take advantage of IP-centric products to develop its entertainment e-commerce segment.
To acquire rights for certain merchandise, Alibaba Pictures is planning to collaborate further with Hollywood film studios.
The company had announced earlier that it has also invested 100 million yuan for an 80 per cent stake in cinema operator Hangzhou Xingji after Dadi Cinema Construction invested one billion yuan in convertible bonds in May.
On Friday, Aug. 26, the company's shares closed unchanged at HK$1.59 in Hong Kong ahead of the announcement. Since the beginning of the year, the company's share price has dropped 18 percent.
