A possible merger between Maoyan and Tencent’s Weipiao would be aimed at heading off a challenge for market share from rival Alibaba’s app Taopiaopiao.
Two of China’s largest online movie ticket companies are in talks to merge operations according to respected Chinese business magazine Caijing.
Citing multiple unnamed sources, Caijing is reporting that market leader Maoyan and Beijing Weiying Technology (aka Wepiao) are in talks to merge but are yet to reach a final deal. Weying CEO Lin Zhu has denied the reports.
The two companies have been toying with the idea of a merger as early as 2015, according to Caijing. Earlier this year, Weying CEO Lin Zhu (David Lin) told the magazine has long been considering buying Maoyan.
Caijing said the talks were being facilitated by Tencent, which owns Weipiao and is a shareholder in Maoyan. A merger between the two companies would help Tencent head off competition from rival app Taopiaopiao, which is owned by tech giant Alibaba.
Maoyan held 33 percent market share in the first two months of 2017, followed by Taopiaopiao on 30 percent and Tencent’s Weipiao on 16 percent, according to data shared by Alibaba’s Taopiaopiao.
Beijing-based studio Enlight Media made an undisclosed investment in Maoyan in May 2016 after the app was spun off into an independent company by parent company Meituan-Dianping.
Any moves to merge Maoyan and Weying are certain to be objected to by Alibaba which bought a stake in Enlight Media in early 2015. Alibaba is unlikely to be able to stop any deal as it only owns 8.8% of Enlight shares.
In February, Chinese investment banking firm CEC Capital Group said the highly fragmented online ticketing market was ripe for consolidation this year. The last round of mergers in the online ticketing space was in 2015 when Tencent’s Wepiao merged with Gewara.
Talk of a merger comes on the heels of an announcement at the Shanghai International Film Festival last month by Wang Changtian, the founder, and chairman of Enlight Media, which controls Maoyan, that the company plans to IPO.