The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
HONG KONG, China — Tencent Holdings Ltd., Asia's largest Internet company, agreed to buy a 15 percent stake in Chinese e-commerce company JD.com for $214.7 million as it steps up its challenge to Alibaba Group Holding Ltd.
Tencent also agreed to buy a further 5 percent stake in JD.com after it completes an initial public offering, according to a filing today. As part of the cooperation agreement, JD.com will acquire Tencent’s e-commerce businesses QQ Wanggou and Paipai and a minority stake in Yixun.
The deal will combine JD.com’s established market selling everything from electronics to fashion with Tencent’s less popular e-commerce platform and provide a bigger challenger to Alibaba, China’s biggest operator. For JD.com, which is planning a U.S. IPO, the 272 million active users on Tencent’s WeChat messaging service could bring increased traffic to its online store.
“Tencent, by injecting its assets likes Paipai into JD.com, can better compete with Alibaba in e-commerce,” said Ricky Lai, an analyst at Guotai Junan International Holdings Ltd. in Hong Kong by phone. “This is quite a good deal for Tencent.”
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JD.com, backed by Russian billionaire Yuri Milner’s DST Global, filed in January to raise $1.5 billion in what may be the largest IPO of a Chinese Internet company in the U.S.
By Lulu Yilun Chen; Editors: Michael Tighe, Aaron Clark, Robert Fenner
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