China's largest online e-commerce site Alibaba has purchased a 4% stake in SM Entertainment, the agency housing some of K-pop's most popular groups including Girls' Generation, EXO, and more.
On Feb. 11, Alibaba purchased 870,000 shares of SM Entertainment at 41,808 KRW (~$35 USD) each, for a total purchase price of about 35.5 billion KRW (~$30 million USD).
Although 4% seems like a small amount, it will give Alibaba leverage to influence company-wide decisions and raises the question of what the two companies will work together to accomplish in the future.
SM will use Alibaba's online music distribution network to promote their songs in China while Alibaba will help with marketing, product planning, and more.
Alibaba founded "Ali Music Group" in July 2015, their first extensive foray into the music market.
A representative for SM Entertainment commented about the purchase saying, "This partnership into the Chinese online music market will create synergy in various fields."
"Through this deal, SM is hoping to be able to localize targeting strategies and accelerate business expansion," the insider added, hinting at the company's plans for the future.