Alibaba Group Holding announced on Monday its plan to raise 10 billion yuan ($1.5 billion) to target China's cultural and entertainment industries and establish a separate cultural and entertainment group.

The new cultural and entertainment group will include video streaming site Youku Tudou, browser firm UCWeb, Alibaba Pictures, Alibaba Music, Alibaba Sports, and Alibaba Digital Entertainment, South China Morning Post reported quoting Chinese media that cited an internal letter from Alibaba's chief executive Zhang Yong.

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All these businesses will be consolidated into the new cultural and entertainment group, Bloomberg reported. And Yu Yongfu, UCWeb's former CEO, will reportedly spearhead the group, while Victor Koo, Youku's co-founder, will take the responsibility of raising the capital and managing the investment fund.

"This is a firm step Alibaba Group took in its strategy in the cultural and entertainment sectors. It also means that a brand new ecosystem, a cultural and entertainment ecosystem, has been formed during the evolution of Alibaba's ecosystem," Zhang told Global Times on Monday, adding that the proposed ecosystem will not only develop Alibaba's own ecosystem but also offer more experiences and services to its consumers and users.

Meanwhile, according to Reuters, Alibaba has confirmed that the investment fund would be more than 10 billion yuan ($1.5 billion) and will be used across its digital media and entertainment businesses.

However, Alibaba will be facing other players in the industry as Internet tech giant Tencent Holdings and real estate developer Dalian Wanda Group have been also putting up huge investments in these sectors.

Separating the Alibaba's media assets is part of its efforts to become more transparent in its earnings report. For the first time last quarter, Alibaba reported its finances in four segments, namely, the core e-commerce business, cloud computing, digital media, and entertainment and other initiatives, Bloomberg noted.

TagsAlibaba, Alibaba Group, Alibaba cultural fund, Alibaba entertainment fund, China Entertainment Industry