JD.com is the latest Chinese tech giant to invest in an elevator ad provider, pumping RMB1bn (US$141m) in cash into Xinchao Media Group as it looks to tap an underexploited area.

This follows Baidu's investment of RMB2.1 billion (US$300m) in the Chengdu-based company in November 2018, FinanceAsia reported.

Owning 700,000 elevators in about 100 Chinese cities, Xinchao is competing with market leader Focus Media – backed by another Chinese internet giant, Alibaba. Focus Media landed a RMB15 billion (US$2.2bn) sum from Alibaba in July last year, and now controls 2.75 million elevators as of the first quarter in 2019.

The money from JD.com will help Xinchao reach offline audiences in middle-class homes in China’s second- or third-tier cities, which are undergoing continuous urbanisation.

Focus Media’s mainstay has been offices and commercial buildings, but, due to the quality of white-collar targets in frequent contact, elevator ads in residential areas are rife with opportunity for Xinchao, as well for marketers.

Zhang Jixue, founder and chairman of Xinchao Media, said the combination of strengths from Xinchao and JD.com will “realise the traffic + transaction marketing loop”, since the offline channels of Xinchao serve as the last mile for JD.com’s e-commerce business.

In general, outdoor adspend in China has been steadily rising since monitoring began in 2003, according to data from WARC’s Adspend Database.

Out-of-home (OOH) advertising can be described as “the last broadcast medium”, and offers fast and broad reach of national audiences – second only to TV. (For more, read WARC’s Best Practice article: What we know about OOH audiences.)

In China that can be seen especially in the food industry’s overall adspend structure, usually dominated by TV and supplemented by elevator ads.

Sourced from JD.com, FinanceAsia; additional content by WARC staff