Ali Music Group, the music branch of Alibaba Group, announced that they will implement a music and e-commerce business cooperation with South Korean entertainment company S.M.Entertainment.

At the same time, Alibaba's Ali Music will take a 4% stake in the Korean company. Alibaba Group established Ali Music in July 2015.

Ali Music said that with the deal, the two parties will jointly develop online music distribution and marketing in China. At the same time, Alibaba Group will purchase 870,000 shares of S.M.Entertainment at KRW40,808 per share, totaling KRW35.5 billion.

Chinese search engine giant Baidu also formed a strategic cooperation relationship with S.M.Entertainment in May 2014. With that deal, Baidu's music division would license the music copyrights of stars from S.M.Entertainment; Baidu's video branch Iqiyi would gain the genuine music videos and performance videos of S.M.Entertainment; and S.M.Entertainment's artists would have an official forum and marketing portal on Baidu.

S.M.Entertainment is an independent Korean record label, talent agency, producer, and publisher of pop music. As a star factory, it was once the home to the original Korean idol groups like H.O.T., S.E.S., and Shinhwa and its current artists include BoA, Super Junior, Girls' Generation, SHINee, f(x), and EXO.