Alibaba Joining Smart TV Market

China's largest e-tailer wants a piece of the fast-growing, Internet TV space, starting with the living room.

Alibaba announced this week that it's developing a smart TV operating system (OS) and set-top box aimed at changing the way customers shop and consume content at home. When launched, the products will let users order goods on Alibaba's group-shopping website, Juhuasuan, and pay through Alipay, a PayPal-like service.

The products signal Alibaba's entrance into the fast-growing Internet TV space. Currently, no major company dominates Internet TV due to fierce competition. As viewers continue to abandon traditional broadcast TV networks in favor of on-demand entertainment, the space seems like it will only grow more competitive. That's certainly been true of the recent past. Last year, Youku acquired Tudou to form Youku-Tudou, and Baidu bought Shanghai-based video provider PPS to merge it with its iQiyi video service.

To help it take hold in the market, Alibaba has partnered with Wasu Media, a digital media provider, to manufacture the set-top box, dubbed the Wasu Rainbow. Like an Apple TV box, the Wasu Rainbow will link any TV to the Internet. Wasu Media has an Internet TV user base totaling more than 8 million registered users.

To create a greater ecosystem of Smart TV OS products, Alibaba has formed an alliance with everyone from computer chip manufacturers like Cisco Systems to Chinese electronics manufacturers like Haier. According to Alibaba, several major Chinese manufacturers, including Skyworth, Haier, and Changhong have already agreed to make TVs with Alibaba's OS in the "near future."

The Wasu Rainbow is expected to launch a few months from now. A price for the device was not disclosed.

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