Alibaba Pictures, the entertainment arm of the Chinese tech giant Alibaba, has warned its investors about possible bigger losses than originally anticipated. Alibaba Pictures revealed that its ticketing unit is to blame.

Reports indicate that Tao Piao Piao, which was formerly known as Taobao Dianying, has overstated its marketing budget and is now facing serious financial repercussions following the recent decline in box office sales in China. In a filing submitted to the Hong Stock Exchange, Alibaba Pictures said it is expecting its net losses in the first half of the year to be around 450 million Yuan (about $60 million).

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A part of the filing reads, "Such expenses were mainly incurred from attracting movie-goers to [use] Tao Piao Piao's online ticketing platform. The online ticketing arm of Alibaba Pictures recently raised 1.7 billion Yuan during an A series funding, raising its valuation to more than $2 billion," according to Deadline.

Many market analysts agree that despite the continuing decline in the Chinese box office, Alibaba Pictures was set to experience heavy losses due to the growing interest in on-demand services in China. Tao Piao Piao also underwent a costly rebranding and restructuring following the firm's latest round of funding, according to Tech Node.

China's box office opened the year with promising records. However, during the middle of the year, the industry took a deep plunge. Statistics show that the second quarter figures were almost 21 percent lower compared to the same period last year.

TagsAlibaba, Alibaba pictures, Alibaba news, Tao Piao Piao, Alibaba online ticketing