Caixin
Mar 19, 2019 08:11 PM
BUSINESS & TECH

Logistics, Games and More: China’s Big Tech Moves This Month

ByteDance’s headquarters in Beijing on Feb. 25. Photo: VCG
ByteDance’s headquarters in Beijing on Feb. 25. Photo: VCG

China’s tech sector is abuzz with merger and acquisition activity, including big moves by Alibaba, ByteDance and Maoyan.

Here’s Caixin’s round-up of the deals and why they matter:

1.Alibaba strengthens logistics foothold

Alibaba Group Holding Ltd. announced early this month that it will pay 4.66 billion yuan ($693.87 million) to acquire an undisclosed stake in leading logistics firm STO Express.

The deal will further tighten the e-commerce behemoth’s grip on China’s booming logistics sector. With the tie-up, Alibaba will hold investments in four of China’s five most influential private logistics companies.

Early last year, Alibaba led a $1.38 billion investment round to buy about 10% of New York-listed ZTO Express (Cayman) Inc. It also owns 11% of Shanghai-listed YTO Express Group Co. Ltd. and 27.9% of Best Logistics.

Unlike smaller rival JD.com Inc., Alibaba doesn’t have its own warehouses and relies on third-party couriers to deliver its goods. This means some of its parcels can take a few days to reach consumers. Alibaba has said it aims to deliver parcels within 24 hours in China and 72 hours globally.

2. ByteDance’s move into lucrative games sector

ByteDance Ltd., which owns the popular short video app Douyin, known as TikTok overseas, has acquired Shanghai-based gaming startup Mokun Technology.

The move signals the startup’s eagerness to tap China’s addiction to online games. The nation has an estimated 626 million gamers, almost twice the population of the United States.

Douyin tested the waters last month, debuting its first in-app game, “Music Jumping Ball.” In addition, Douyin now allows third-party developers to launch games on its platform.

ByteDance is the world’s most valuable unicorn — a startup worth more than $1 billion. It’s widely seen as a rising challenger to China’s now-established “BAT” firms — China’s biggest tech trio — Baidu, Alibaba Group and Tencent.

Mokun was founded in 2013. Its title “Fighter of the Destiny” raked in nearly 200 million yuan in the month after it launched.

3. Maoyan diversifies into movie production houses

Movie-ticketing platform Maoyan struck a deal with a film production house on March 12, forking out HK$390 million ($50 million) for a 7.5% stake in Huanxi Media Group Ltd.

The move follows in the footsteps of Alibaba, which invested in two studios in January. Technology heavyweights including Tencent and iQiYi have also been flexing their muscles in the world’s second-largest cinema market.

China again posted record box office takings last year, fueled by best-selling domestic productions. It’s projected to overtake North America in the near future.

Tencent-backed Maoyan raised $250 million in its initial public offering on the Hong Kong Stock Exchange in February. Its recent deal with Hong Kong-listed Huanxi gives Maoyan the right to co-invest in, as well as promote and distribute Huanxi film and TV projects.

Huanxi is backed by a slew of directing talent, including internationally renowned filmmakers Wong Kar-wai and Jia Zhangke.

Jason Tan contributed to this report.

Contact reporter Tang Ziyi (ziyitang@caixin.com)

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