Chinese Tech Giant Sets Up Shop Locally

By Nick Ostiller

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Alibaba Pictures, an entertainment subsidiary of the Chinese e-commerce company Alibaba, recently rented this office space in downtown Pasadena.

It was the fall of 2014 when Chinese e-commerce juggernaut Alibaba Group made history by garnering a record $25 billion during its initial public offering at the New York Stock Exchange. Nearly two years later, an entertainment subsidiary of the multinational corporation worth more than $204 billion has made Pasadena its new home.

Alibaba Pictures, the most valuable film company in China with a market cap of $5.4 billion, now occupies 22,000 square feet atop the Playhouse Plaza office building at the southeast corner of Colorado Boulevard and El Molino Avenue.

The 10-year lease represents yet another signal of Pasadena’s recent emergence as a Southern California hub for entrepreneurship and innovation akin to the Silicon Beach communities across town.

“We designed Playhouse Plaza to attract top-flight companies in Pasadena, whether they be financial wealth-management, tech, entertainment, media, any and all of the above,” said Dave Saeta, senior vice president at IDS Real Estate Group, the firm responsible for developing the property and unveiling the completed structure two Aprils ago. “When Alibaba expressed interest, I think it helped validate the design attributes and positioning of Playhouse Plaza within the market.”

The local interests of Alibaba Pictures revolve around co-financing the work of large studios and producers in order to market and distribute their content in China.

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Alibaba Pictures President Wei Zhang

“This Pasadena office will be sort of the entertainment hub for Alibaba,” Wei Zhang, president of Alibaba Pictures, told the Outlook. “Given its proximity to Hollywood — part of our focus is really working with the best people in the industry — it naturally makes sense for us to set up a presence here.”

Alibaba Pictures chose Pasadena instead of other trendy Southern California locations such as Beverly Hills and Santa Monica because of parallels between the city and the company’s home base in China. Alibaba’s main headquarters is located in a town called Hangzhou, which is a two-hour drive from the Shanghai metropolis. Similarly, Pasadena is on the fringes of greater Los Angeles.

“In Pasadena, we really felt more of a campus feel that reminded us of our Hangzhou headquarters,” said Zhang, who had conversations with Pasadena Mayor Terry Tornek and Economic Development Manager Eric Duyshart during Alibaba’s search for office space. “You’ve got a variety of cultures, some history and also a lot of ways that you can actually meet with people — different venues. You can pretty much walk out of the office building and you don’t even need to drive a car to get to many places. … We’re lucky that we found the Pasadena Playhouse Plaza because it is difficult to find a location in a brand-new building. It worked out perfectly because the building was about to finish.”

The fifth-floor office is Alibaba’s sixth location in the United States and there are about 10 employees currently working there, although that number is expected to rise in the coming months, according to Zhang. Business for Alibaba Music and the company’s online streaming service Youku will also be conducted out of the Playhouse Plaza.

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Alibaba Pictures signed a 10-year lease to occupy 22,000 square feet on the fifth floor of the Pasadena Playhouse office building. The structure was completed in 2015.

“Having Alibaba making Pasadena the home for its U.S. entertainment operation is very exciting,” said Pasadena Chamber of Commerce President and CEO Paul Little in an email.

“Pasadena is a perfect location for companies overseas who are looking for a location with easy access to downtown Los Angeles and the San Gabriel Valley and Orange County. Also, we have a safe, clean and hospitable downtown with all the amenities that companies are looking for.”

Alibaba is also looking to strategically skirt China’s strict quota system that allows just 34 foreign-made films into the country’s theaters each year. The purpose of the limit is to foster China’s domestic movie industry while curbing the influence of western culture. By co-financing projects alongside industry leaders in the entertainment capital of the world, Alibaba Pictures has found a loophole of sorts.

“How you get around it is by having Chinese companies either investing in the movie or part of the production is done in China, from special effects to filming,” said Alibaba Vice President of International Media Bob Christie.

A team of 18 people led by former Hangzhou English teacher Jack Ma founded Alibaba Group in 1999. The company began as an online marketplace for small Chinese exporters and entrepreneurs to reach global buyers. Today, Ma is one of the richest men in Asia and Alibaba employs more than 36,000 people, although less than 1,000 of them work in the United States. That number may rise, though, as entertainment connections continue to form at the Playhouse Plaza.

“Since we opened our office here, we’ve had lots of people coming from Beverly Hills and Hollywood to meet with us,” Zhang said. “They all think very fondly of Pasadena, but very few of them actually realize that this is a great environment for business as well. Everyone who comes is usually quite impressed with the building, the office, with all the surroundings. They just think the city’s beautiful and has a great vibe for entrepreneurship and creativity.”

Originally published for the Pasadena Outlook Newspaper on Aug. 4, 2016.
Nick Ostiller can be contacted on
Twitter or by email at nostiller229@gmail.com.

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• Journalist based in Los Angeles • nostiller229@gmail.com

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