Chinese eSports sector welcomes e-commerce giant

Chinese eSports sector welcomes e-commerce giant

Thursday, March 31, 2016 Totally Gaming
Alibaba and YuuZoo form game-changing joint venture

The eSports sector in China has received arguably its biggest boost to date with the news of a major agreement this (Thursday) morning featuring e-commerce giant Alibaba.

YuuZoo, which operates in the social sphere and is listed on the Singapore stock exchange, has struck a deal with Alibaba to launch a joint venture, YuuZoo, in China. YuuZoo will operate eSports competitions such as the new AliSports World Electronic Sport Games (WESG), which will launch in the coming days, as well as the E-Sports Clubs Competition Center.

WESG will feature 20 eSports club competition centres competing for RMB35.6m (€5m/$5.5m) in prize money. However, the potential for the competition and the operation as a whole is huge, with China being home to more than 100 million eSports fans and over 440 million gamers.

AliSports, a new unit of Alibaba that has been established to target the Chinese sports industry, is planning to launch in partnership with YuuGames as many as 1,200 eSports events this year in 15 cities across China. AliSports will invest up to RMB100m in WESG alone.

YuuGames will receive a “multi-million-dollar fee” to organise and run the eSports properties and the joint venture will generate additional revenues from promotional fees, advertising revenue and e-commerce sales.

“As a new partner to China's largest e-commerce group, we are not only looking to reinforce our position as a leader in China's eSports sector, but also to discuss opportunities with Alibaba Group to jointly grow YuuZoo's other China-based businesses, including our gaming business, payment business and social e-commerce business,” YuuZoo chairman Thomas Zilliacus said.

The deal marks the latest major investment by Alibaba in the sports and entertainment industry. As reported by TotallyGaming.com, less than a month ago, a subsidiary of the online retail giant sealed a deal to acquire a controlling stake in Hong Kong-listed lottery operator AGTech for HK$2.39bn (€280m/$308m).

 

TotallyGaming.com says:

 

Alibaba has been on a spending splurge in recent months, so it is no surprise that the company will be at the forefront of this game-changing eSports venture. China is a huge eSports market and Zilliacus’ comments about exploring related business opportunities will be intriguing to service providers targeting the country. The deal also illustrates the importance of linking up with an established, native Chinese company if you are looking to do business in the country. Trying to enter the market without support from a Chinese partner is extremely difficult, as the operators of many failed ‘outside’ ventures will testify.

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