Skipper

Alibaba invests over $2bn in OOH in effort to extend its offline reach

Tim Maytom

Chinese eCommerce giant Alibaba has invested $2.23bn (£1.71bn) in Focus Media, a Shanghai-based digital OOH firm that operates in China, Singapore and Hong Kong. The investment, which represents a significant stake in Focus Media, comes as Alibaba is aiming to strengthen its presence in the offline world.

Focus Media currently claims to reach 200m middle-class consumers across 300 cities in China via its outdoor advertising screens, which are placed in streets, on public transport and in elevators. The firm has previously announced plans to grow that reach to 500m across 500 cities, an ambition that ties closely to Alibaba's online-to-offline strategy, which it has called 'New Retail'.

The investment was broken up across several firms. Alibaba is investing $1.43bn directly in Focus Media, acquiring a 6.62 per cent share of the firm. It is also buying 10 per cent of an entity managed by Focus Media founder and chairman Jason Nanchun Jiang that controls 23.34 per cent of Focus Media.

In addition to the $1.43bn direct investment and $504.7m invested indirectly, an Alibaba-aligned fund called New Retail Strategic Opportunities is buying a 1.37 per cent share of Focus Media, and Alibab has an option to buy a further five per cent of the business over the next 12 months, which it is likely to take.