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Alibaba is deepening is presence in India, this time through the acquisition of a majority stake in film ticketing site TicketNew. The terms of the purchase were not disclosed, but Alibaba’s entertainment wing, Alibaba Pictures Group, was earlier reported to be in discussions to pay $35 million to control a 70% to 75% stake, according India-based news website Mint.
The acquisition mirrors similar moves Alibaba has made in its home market of China.
In March, the company picked up full control of online ticketing service Damai. In China, services like Damai have been a key component of the so-called online-to-offline (O2O) ecommerce sector, in which online consumers are pushed to make purchases at real-world locations, like movie theaters.
While the concept of O2O is less known in India, the principle remains the same. Alibaba’s plan is to take lessons learned in China and apply them in India through services like TicketNew.
According to a statement from TicketNew founder and CEO Ramkumar Nammalvar, Alibaba also plans to invest INR1.2 billion ($18.6 million) into the company.
The acquisition gives Alibaba immediate ingress into India’s massive film industry. Nammalvar told The Hindu that he estimated the country’s annual movie ticket revenues were somewhere between $2.2 billion and $2.5 billion, but that online sales accounted for only 10% to 15% of earnings.
Cinema is deeply embedded in India’s cultural DNA, as evidenced by the amount of ad spending dedicated to the media channel. Pitch-Madison estimates that cinema ad spending in the country will total INR6.01 billion ($89.5 million) this year, up 15.0% from 2016’s figure.
TicketNew noted that although online ticketing is not yet a common practice in India, it is seeing significant growth—especially in smaller cities. “In India, online movie ticketing is becoming increasingly popular, with increasing penetration in Tier 2 and Tier 3 regions,” TicketNew’s press statement read.
The company added that it hoped Alibaba Picture Group’s “operational know-how and financial resources” would help it expand its market share of ecommerce ticketing.
TicketNew’s most significant competitor in India’s online ticketing sector is likely BookMyShow, which is considered the market leader.
Alibaba has already expended significant capital in a stake in Paytm, a digital payment service in India that also operates an ecommerce platform. Interestingly, Paytm also offers an online ticketing service, one that sold an average of 3 million movie tickets monthly during the year ending in March 2017.
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