Smartphone maker Xiaomi Technology is set to acquire a stake in China-based video streaming site Youku Tudou, Reuters has reported.
The size of the stake and financial details have not been disclosed.
The agreement follows Xiaomi’s announcement last week that it will invest $1bn into expanding its internet video content. Xiaomi and Youku Tudou will co-invest in the production and distribution of video content while Xiaomi will also license Youku’s existing video library.
E-commerce company Alibaba owned a 23.4% stake in Youku Tudou as of May this year, a month after it led a $1.2bn funding round for the online video company, which may put it at odds with Xiaomi as both companies sell set-top boxes.
China’s online video market is growing fast, and the market is currently worth an estimated $3bn. Other local offerings include search engine provider Baidu’s iQiyi, Sohu.com and a streaming portal owned by internet portal Tencent.