(Yicai Global) Jan. 21 -- Alibaba Group Holding has taken a minority stake in Konka Group's smart television unit for an undisclosed sum as the Chinese internet giant expands its presence in the Internet of Things.
Alibaba bought 3 percent of KKTV from Shenzhen-based Konka on Jan. 18, Yang Jungang, the subsidiary's general manager told Yicai Global.
"There's a lot to do to achieve smart TVs, and more partners are necessary," Yang said. "Alibaba has ideas about smart homes."
The IoT field is expanding, and about 47 million internet TVs will be sold in China this year, according to Yang. Hangzhou-based Alibaba has already invested in Haier Group's smart TV business and has launched its own Tmall Box internet TV and Tmall Genie loudspeakers.
Alibaba will provide Konka with constant value services, including a content engine based on online video platform Youku Tudou, interactive technologies from artificial intelligence lab Alibaba Damo Academy, as well as Alibaba's new retail infrastructure for marketing, Zhuang Zhuoran, Alibaba vice president and Youku Tudou chief operating officer, said at the signing ceremony.
KKTV will sell up to one million internet TVs this year. Its 55-inch 64-gigabyte sets cost less than CNY3,000 (USD442.60). "KKTV can surely gain 30 percent more in terms of operating income than last year," Yang added.
KKTV has been slashing prices of its hardware in order to engage more users with its software services where revenue streams can form. Xiaomi founder "Lei Jun proposed a less than 5 percent margin on Xiaomi's hardware, while we offer lower than zero percent on ours," Yang said.
Editor: Emmi Laine