Alibaba Group Holding Ltd. plans to raise a RMB10 billion (US$1.5 billion) investment fund to support China's cultural, media and entertainment sectors, as the e-commerce giant aims to capture a larger share of Chinese consumers' leisure time.
At the same time, Alibaba plans to establish a separate cultural and entertainment group with the vision to help Chinese films, literature, music and sports embrace the Internet age, according to Chinese media reports citing an internal letter sent by Alibaba's CEO Zhang Yong today.
"Alibaba's cultural and entertainment ecosystem will integrate with our e-commerce, financial services, logistics and cloud ecosystems to enrich our services to users," Zhang wrote in the letter.
The new group will encompass the businesses of Youku Tudou, UCWeb, Alibaba Pictures, Alibaba Music, Alibaba Sports, and Alibaba Digital Entertainment.
Yu Yongfu (pictured), formerly chief executive of UCWeb Inc., a Chinese mobile Internet and software service firm acquired by Alibaba in 2014, will become CEO of the new group and report to Zhang Yong.
At the same time, Alibaba announced that Gu Yongqiang would terminate his position as chief executive of online video unit Youku Tudou and be in charge of the fund's capital raising and management.
The letter did not say who will replace Gu Yongqiang as the new CEO of Youku Tudou, which Alibaba bought out in April.
Youku Tudou dropped to be the third largest online video firm in 2015, as iQiyi and Tencent Video surpassed it last year in video viewing hours.
In particular, Youku Tudou's mobile app monthly viewing hours increased 1.6% in 2015, while iQiyi and Tecent Video experienced growth rate of 67.5% and 123.2%, respectively, according to Chinese data tracker iResearch.