Alibaba’s New Mouse Ears & Printer’s Ink Round Out Deals For Year
This has been an action-packed year for Alibaba deals, and 2016 looks to be strong as well for the e-commerce giant.
In the past week alone, Alibaba has confirmed a $100 million purchase of Hong Kong-based publication South China Morning Post (SCMP), as well as partnered with Disney to launch an on-demand streaming service, DisneyLife, in China.
The SCMP purchase, which had been the subject of speculations for weeks, is widely believed to represent a move by Alibaba to influence the West’s perception of China. Alibaba has previously said that negative reports about China are impacting its shares. SCMP is one of Hong Kong’s most influential English-language titles, and is not subject to Beijing’s censorship.
At the same time, Alibaba has explained that it intends to allow SCMP to retain full editorial independence, to produce “balanced and fair” reporting, including on China and Alibaba itself.
The deal with Disney allows Alibaba to expand its own entertainment services on its home turf, China. The partnership is monumental for Disney because of barriers that prevent foreign television networks from entering China. By working with Alibaba through a multi-year licensing deal, Disney is able to launch its content system in China.
It also allows Disney to sell a device — shaped like Mickey Mouse and priced at $125 – to connect users to Disney content, and let users plan a visit to the Hong Kong and Shanghai Disneyland theme parks.
This global outreach Alibaba is expected to continue strong. Alibaba can likely afford to spend up to $38 billion in acquisitions and investments in 2016, according to an analyst forecast at BNP Paribas SA. This amount puts the company’s spending power ahead of Chinese rivals Tencent and Baidu, which have an estimated $35 billion and $15 billion, respectively, to invest next year.
A push by all three players has centered on “online-to-offline” (O2O) services, commonly known in the West as on-demand. For example, Alibaba backed group-buying website Meituan prior to its Q4 merger with Dianping, and it is also a big backer of ride hailing market leader Didi Kuaidi. Collectively, Alibaba, Tencent and Baidu have invested $30 billion in O2O startups this year.
