CNBC’s The China Connection: The Secret Behind Alibaba’s Animation Success
Alibaba’s Youku Takes on Global Animation Market with Data-Driven Approach
Alibaba’s Youku, often compared to Netflix, is making waves in the global animation market by leveraging user data to shape its content. This strategy is evident in the success of “Cang Yuan Tu,” a popular animated series that has entered its third season. The show’s executive producer, Huiyu Xu, highlights how the platform uses insights from its 170 million users to determine what stories to tell.
Unlike traditional Hollywood approaches, which often start with creative concepts, Youku focuses on what its audience prefers. This data-driven model has proven effective, as seen in the popularity of “Cang Yuan Tu,” which originated from a 2019 online novel that received over 5 million reader recommendations in just over a year.
The fantasy martial arts series has gained more than 9.9 million followers in China since its first season aired in 2023. It stands out as the most popular show on Alibaba’s video platform, which offers a mix of domestic and foreign movies and TV shows for 25 yuan ($3.62) per month. A movie version of “Cang Yuan Tu” is planned for summer 2027.
To meet rising viewer expectations, Youku has continuously improved the production quality of the series. This includes enhancing the level of detail in animations and hiring better artists to create the watercolor stills featured in the show.
“Compared to Disney animated films, there isn’t much difference versus three years ago,” Xu said in Mandarin Chinese, translated by Jendela Magazine. “But for us, it’s like night and day.”
Hollywood’s Interest in China
Despite censorship and restrictions on the number of U.S. films that can be shown each year, Hollywood remains interested in the Chinese market. Disney’s 2025 film “Zootopia 2” earned about a third of its $1.87 billion global box office in China, making it the top-grossing Hollywood film of all time in the country.
New York-based film production and distribution company A24 is also bringing its highest-grossing movie to date, “Marty Supreme,” to China this month. To promote the story of a fictional table tennis star, lead actor Timothee Chalamet visited China for the premiere in Beijing. He even played ping-pong with locals and served traditional street food out of a cart, all documented on his new celebrity account on social media platform Xiaohongshu.
However, the opening weekend box office takings for the R-rated film were just over 3 million yuan ($440,000), according to Chinese online ticketing site Maoyan.
Expanding Beyond China
Youku is not only focusing on the domestic market but also expanding its reach internationally. “Cang Yuan Tu” is gaining traction in Thailand and Vietnam, according to Youku. The company operates an international streaming platform and a YouTube channel with 1.27 million subscribers for animation alone. To watch full episodes with subtitles, viewers must pay $3.99 a month.
In English, “Cang Yuan Tu” is officially translated as “The Demon Hunter,” but it has no affiliation with the popular Netflix show “KPop Demon Hunters.” Youku plans to release other animated content this year with urban and futuristic settings that have less apparent traditional Chinese elements, Xu said. However, the company is not immune to the impact of artificial intelligence, something Xu expects to affect special effects teams more than smaller teams handling creative direction.
In the U.S., A24 has reportedly launched an AI lab with funding tied to OpenAI. The film company, known for working closely with directors, also quietly opened its first movie merchandise store in mainland China — inside Alibaba’s new Beijing offices.
Cultural and Technological Insights
When asked about the third season of “Cang Yuan Tu,” which centers on a mythological phoenix, Xu hinted at the team’s message. “Just because there is war, it doesn’t mean we should stop living. No matter what happens outside, a person’s heart should remain bright,” he said.
Need to Know: U.S.-China Developments
Both sides reached a “new consensus” in Paris, according to China’s Commerce Ministry, despite Trump delaying a trip to Beijing originally planned for late March. Alibaba has also cut jobs, with a 34% drop in headcount last year amid a shift to focus on AI. Meanwhile, Nvidia chips have been the subject of scrutiny, as U.S. prosecutors have charged Super Micro Computer employees with smuggling them to China.
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