Alibaba Group Holdings Ltd is prepping to launch an online video streaming service in China that will emulate Netflix Inc and HBO.

Following in footsteps of U.S.'s Netflix Inc. and HBO, Chinese e-commerce giant Alibaba is all set to launch an online video streaming service in China, the company's head of digital entertainment confirmed on Sunday, June 14.

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The upcoming service will be dubbed TBO or Tmall Box Office, and it will debut into a competitive world of China's online video market. In their bid to attract viewers and become dominant, Chinese companies are spending huge amount to buy media content.

Reports on IBN Live cite Alibaba's Patrick Liu, who told reporters in Shanghai that Alibaba Group Holding Ltd will launch its online video streaming service in China in about two months. The service will encompass content bought not only from China but also from other countries, along with in-house productions.

The company's new service will lock horns with the likes of Leshi Internet Information & Technology Corp Beijing (LeTV), Sohu.com Inc., and Tencent Holdings Ltd, Baidu Inc's iQiyi.

Liu noted that Alibaba's mission is simply to redefine home entertainment and the company's goal is to become in China what HBO and Netflix are in the United States.

Alibaba's move did not immediately clarified how its new service would fit with Youku Tudou Inc, which is one of China's biggest video streaming services in which Alibaba bought a whopping 16.5 percent stake in 2014.

Almost 90 percent of TBO's content will be paid for, unlike most of domestic rivals. The content would either be paid via monthly subscription or on a show-by-show basis, Liu added.

That being said, the remaining 10 percent would be free, USA Today noted.

TBO will target more than 600 million families through Chinese-created content, content from other and in-house productions. Netflix on the other hand is planning to launch its service in China, an extremely challenging task for foreign internet companies.

No doubt, the Chinese e-commerce giant has the home field advantage in China. This implies that as Alibaba expands its empire, it will become more and more difficult for American tech companies to break into a market that has almost been impossible for foreign companies to penetrate.

Its not a secret, several foreign tech companies view China as the next frontier for growth.

Along with its e-commerce operations, Alibaba also has a hold in cloud computing, search, mobile payments, and numerous strategic investments in ride-sharing. The company even ventured into messaging apps and social networks; basically Alibaba has explored every corner of the digital space.

TagsChina tech news, netflix, HBO, TBO