Chinese tech giant Alibaba announced through an SEC filing on Thursday that its Taobao marketplace has acquired around 24 million shares in Bilibili, representing roughly an 8% stake in the Chinese video and entertainment platform.

The deal brings closer ties between the two companies—they are already in partnership since December. Under that agreement, Taobao and Bilibili said they would bring creators together, and promote commercialization of both platforms.

China’s recent rise of content-driven e-commerce is another testimony to the saying that content is king. Chinese microblogging platform Weibo is planning to invest RMB 2 billion ($295,000) in the next year to support the key opinions leaders, actors, and agencies. Short video apps like Kuaishou and Douyin also tap on the tide.

Bilibili boasts an extra advantage in that its millennial-faced content is particularly attractive for tech giants who are trying to keep up with the changing tastes of China’s digital natives who are gaining economic independence. More than 80% of Bilibili’s users were born after the 1990s.

In addition to the core e-commerce business, Alibaba’s partnership with Bilibili expands to other areas. Alibaba-backed food delivery giant Ele.me has launched a membership promotion program with Bilibili to target at China’s young anime fans. Tencent, the second largest shareholder of Bilibili, entered a partnership with the company on “sharing and operating” anime and games on the platform. In China, it is a rare case for a tech startup to be co-invested by the two tech giants.

To reinforce its status as the home of China’s ACG (anime, comics, and games) fans, the company acquired the comic assets from its rival NetEase in December.

Despite its popularity, Bilibili is still facing profitability problems. The US-listed firm recorded a net loss of RMB 202.7 million in the third quarter of last year, significantly higher than the RMB 2.9 million loss recorded in the same period in 2017. Increasing financial pressure may form another driver for its commercialization moves.

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at lixin@technode.com. More by Emma Lee

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