BEIJING: Video-streaming site Youku is on the verge of completing the integration of its customer data with those of its parent, internet giant Alibaba, a development that opens the way to creating more detailed customer profiles and targeted advertising.

"Alibaba knows the shopping preferences of 400m online shoppers while Youku knows their video viewing habits," said Yang Weidong, president of Youku Business Division, in remarks reported by the South China Morning Post.

With 30m paying viewers, it's an exaggeration to claim that Youku understands what all Alibaba's customers are watching, but that total gives it upwards of 40% of the OTT market, nearly all of whom are in the valuable youth market.

And as Tony Yang, Youku-Tudou SVP, noted, this is an important demographic for the entertainment industry since they typically have more time and money to spend on leisure and fun.

The ability to come up with accurate viewer profiles to whom relevant advertising can be directed will be important in this rapidly growing sector, which analytics firm App Annie has forecast will be a $5bn market by the end of 2017.

iQyi, the video-streaming site owned by search engine Baidu, for example, claimed in June this year to have passed 20m paid subscribers, doubling the total in just six months. A planned IPO next year is expected to value the business at between $4bn and $5bn.

Youku, meanwhile, has just marked its tenth anniversary with a rebrand aimed at winning over more younger viewers.

And it recently announced a three-year licensing partnership with film company Oriental Dreamworks that will see a premium family entertainment content bundle made available to users of Youku, Tudou and Tmall Box – the three platforms making up Youku Business Division, which in turn sits within the Alibaba Digital Media & Entertainment Group.

Data sourced from South China Morning Post, Youku, Wall Street Journal; additional content by Warc staff