Chinese Internet giant Tencent, which is best known for its wildly popular messaging service WeChat (known as Weixin in China), has officially combined its e-commerce operations with online retailer JD.com, after rumors last month hinted at such a move.
The two companies have inked a strategic partnership that will see JD tap on Tencent’s significant mobile and Internet user base — WeChat, for example, has 272 million monthly active users– and Tencent will be able to leverage on JD’s e-commerce services. As part of their cooperation, Tencent will support JD in its e-commerce business by offering priority access points in its chat platforms, WeChat and mobile QQ, as well as provide support from other key platforms.
Tencent will initially hold a 15 percent stake in JD upon the completion of this deal, which Bloombergpins at $214.7 million, and it will further subscribe at IPO price for an additional 5 percent of JD on a post-IPO basis. JD just filed for a $1.5 billion IPOin January this year.
In the meantime, JD will acquire 100 percent interests in Tencent’s e-commerce businesses — including QQ Wanggou and Paipai marketplace, logistics assets and personnel, as well as a minority stake in Tencent’s e-commerce site 51Buy.com(known as Yixun in China).
Both companies will also cooperate on online payment services, as they seek to improve the online shopping experience of customers. WeChat in China has already integrated payment options, and the partnership will no doubt give more emphasis to that.
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