Tencent to take stake in JD.com to challenge Alibaba
The Chinese Internet giant is paying nearly $215 million for 15 percent of JD.com, China's second-largest e-commerce company behind Alibaba.
Chinese Internet giant Tencent Holdings is taking a stake in JD.com, a partnership aimed at challenging Alibaba Group Holding's e-commerce dominance.
Tencent has agreed to pay $214.7 million for a 15 percent stake in JD.com, the companies announce late Sunday. JD.com is China's second-largest e-commerce company behind Alibaba, which controls nearly 80 percent of China's internet shopping market.
As part of the deal, Tencent agreed to buy an additional 5 percent stake in JD.com after it completes a planned $1.5 billion US listing ahead of a much-anticipated listing by Alibaba.
The deal will combine JD.com's successful marketplace for merchandise with Tencent's e-commerce platform and the 272 million active users on Tencent's WeChat messaging service, which is expected to drive increased traffic to JD.com.
In addition to joining strategic cooperation agreement, JD.com will acquire Tencent's Wanggou and Paipai e-commerce units and a minority stake in Yixun.
"Our strategic partnership with JD will not only extend our presence in the fast-growing physical goods eCommerce market, but also allow us to better develop our enabling services such as payment, public accounts and performance-based advertising network to create a more prosperous ecosystem for overall eCommerce activities on our platforms," Tencent President Martin Lau said in a statement.