By Wang Shen
The Alibaba Group and its affiliates will invest RMB 15 billion in the Focus Media Group for a 5.28 percent stake of their shares, as reported by the Yicai Group Media on Wednesday.
Alibaba signed a share transfer agreement with the Power Star (HK) Limited and the Glossy City (HK) Limited on July 17. Alibaba was granted a total of 774 million shares of Focus Media held by the Power Star and the Glossy City at a price of RMB 9.9167 per share.
Founded in 2003, Focus Media created and pioneered the biggest lifestyle targeted interactive digital media network in China. Its business scope includes liquid crystal display (LCD) networks, poster frame networks, movie theatre networks and in-store networks.
In 2005, Focus Media became the first Chinese advertising and media company listed on Nasdaq in the U.S. It returned to the A-share market in 2015, with a market value of over RMB 100 billion.
The success of Focus Media depends on its posters in the elevators of communities, which enable it to create mandatory audiences in the limited space in an elevator and a high attention for advertisements during passengers' boarding time.
According to Focus Media's annual report, it had formed a network of living space media covering more than 300 cities by the end of March 2018 and had received an operating revenue of RMB 12.01 billion in 2017, up 17.63 percent year-on-year.
Zong Ruixing, the founder of the CloudXink Technology Corporation, stated that the investment from Alibaba would significantly accelerate the process of the digitization of outdoor advertising and stimulate other Internet companies to increase their market shares in the industry.
Cao Lei, the director of the E-commerce Research Center, suggested that Focus Media would provide Alibaba with a massive flow of customers and data, and help e-commerce and the service industries as well as marketing to be closely connected.
