Alibaba takes the lift to China's digital screen market

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Jack Ma's ecommerce giant Alibaba has bought into Chinese digital advertising company Focus Media with a minority stake valued at US$1.43 million.

Alibaba, which owns the Hong Kong-based South China Morning Post, gains less than seven per cent but says it plans to buy a further five per cent next year.

Shanghai-based Focus has digital advertising screens in 300 Chinese cities - mostly in underground stations and lifts - which it claims reach 200 million Chinese daily.

In a statement, Alibaba said the partnership with Focus - which aims to boost its reach to 500 million "middle class consumers" via five million terminals in 500 Chinese cities - will enable it to connect the brands selling on its e-commerce platforms with these consumers "and their rising spending power".

Analytics collected from its users would be leveraged to help brands better understand and reach Chinese consumers, and identify, target, reach and retain customers. "This approach to digital marketing, which offers more advanced and reliable marketing tools to brands than traditional marketing, has always been at the core."

Alibaba would also invest $511.1 million in an entity controlled by Focus Media's chairman Jason Jiang, by subscribing to newly-issued shares. Founded in 2003, Focus Media Group claims China's biggest lifestyle-targeted interactive digital media network with a networks of LCD displays, poster frames, and for cinemas and instore.

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