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Tencent to pay US$215m for stake of JD.com in e-commerce expansion

By Zhu Shenshen | March 10, 2014, Monday | Online Edition

TENCENT Ltd announced today it will pay US$214.7 million for a 15 percent share of China's business-to-consumer website JD.com in an expansion of China's top dot-com in the e-commerce sector now dominated by rival Alibaba Group.

As part of the deal, Hong Kong-listed Tencent will sell its e-commerce businesses including minority stakes in Yixun, QQ Wanggou and Paipai to JD.com.

Tencent would also buy a further 5 percent stake in JD.com after it completes an ongoing initial public offering in the United States to raise about US$1.5 billion, according to both sides.

The deal is meant to combine JD.com's advantage in the e-commerce sector and Tencent's leading positions on social platforms with hundred of millions QQ and WeChat users.

The huge user base is expected to boost traffic to the online stores of JD.com and Yixun.

Combining both sides will create a complete ecosystem online covering e-commerce, social media, payments and advertising platforms, said Tencent.

In the Chinese online market landscape, Tencent, with a strong social and game business, is competing with archrivals Alibaba for e-commerce and payments and Baidu for search.

Before the investment in JD.com, Tencent had acquired a 20 percent share of the online restaurant review and coupon sales website Dianpian with an estimated US$400 million to US$500 million to penetrate the e-commerce sector.

JD.com, backed by Russian billionaire Yuri Milner’s DST Global, filed to raise US$1.5 billion in the United States in January, which is expected to be the biggest US IPO of a Chinese Internet company.

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