The appointment follows the e-commerce giant's purchase in March of an 8.8% stake in the Chinese production firm for $380 million.
Alibaba Group Holding Unit's (NYSE:BABA) is seeking to rise up from its loss by boost its movie and film unit by announcing that Alibaba Chairman, Shao Xiaofeng, will become CEO of Enlight Media, which is one China's leading private film production companies.
The move comes as Alibaba had acquired a less than 9% stake in Enlight in March this year. The appointment of Shao is seen as a sign of growing cooperation between the two companies, with Alibaba Pictures seeking to boost its competitive strength in the mainland Chinese market. It is part of Alibaba Group chairman, Jack Ma's, strong ambition to be "the biggest entertainment company in the world", but the struggling unit which has clocked a $55 million loss last year fall flat in the face of his ambition.
Enlight last year has snapped up Israeli production firm Keshet, which has a strong record of making domestic/locally produced films and has made its intentions clear to expand into the field of Hollywood too, while creating synergies that may prove to favor Alibaba Pictures.
The major pull factors for Alibaba Pictures to acquire Keshet may be attributed to the strong base of the company producing localized yet good quality films, such as Lost in Thailand, which had raked in more than 200 million in China, as well as a laid out plan to invest around $550 million to produce 32 films by 2017.
While Alibaba is seen more as an online ecommerce company, it has been diversifying into the field of filmmaking, not least because of the slowdown in the global economy, particularly in China, where transactions are declining in volume and value, but because it sees strong potential in entering the film industry in China.
This resulted in Alibaba purchasing China Vision Media Group at a value of $800 million resulting in the formation of Alibaba Pictures, but not before it discovered many flaws and accounting irregularities in relating to tax and VAT misstatements
The ecommerce giant spent $3 billion in the entertainment sector, and even went as far as going for shopping content from Hollywood films, but no 'big bang' move has been made just yet.
In late March, the company signed up a strategic partnership deal with the Shanghai International Film Festival in a bid to generate a platform for future Chinese filmmakers to send out a message of the country in the world, as well as roping in renowned stars to feature in local Chinese films.
Alibaba Group stock price ended the day at $93.27, flat from almost yesterday.