Tencent makes e-commerce play with JD.com deal to buy online style retailer Vipshop

Tencent Holdings, operator of the ubiquitous WeChat messaging app, is broadening into retail e-commerce by means of a collaboration with China’s second largest online merchant JD.com in a move that is most likely to challenge the dominance of Alibaba’s Tmall in online shopping.Tencent and JD.com

will invest a combined US$ 863 million in money in Vipshop, an online discount rate retailer for fashion brand names in China.Under the deal, Tencent will approve Vipshop access to its Weixin Wallet so that Vipshop can access online purchaser traffic from Tencent’s Weixin platform, while JD.com will offer Vipshop access to the main webpages of its mobile application and its Weixin Discovery shopping website, and will help Vipshop in attaining particular gross product value( GMV)targets through JD.com’s platform, according to a statement from Tencent.Tencent first developed a business relationship with JD.com three years ago when it

offered the online merchant with access to its WeChat platform, which presently has a reach of 1 billion people. This newest offer signals that the 2 tech giants are combining forces to challenge Alibaba, the No 1 online e-commerce platform in China.” We eagerly anticipate supplying Vipshop with our audiences, marketing solutions, and payment support to assist the business supply branded clothing and other product classifications to China’s increasing middle class,”said Martin Lau, president of Tencent.” We currently see considerable need from our users to find, go over and buy branded apparel in our applications, and we think that connecting our users more deeply to items on Vipshop’s platform will improve their online experiences while benefiting Vipshop.”Tencent and JD.com will invest around US$ 604 million and US$ 259 million respectively in Vipshop.Separately, Tencent is purchasing 5 per cent of Chinese grocery store chain Yonghui Superstores for about 4.22 billion yuan(US$ 638 million), Yonghui stated in an exchange filing on Friday. It represents an uncommon move by Tencent into a physical retail arena wished for by rival Alibaba.During the Singles’Day shopping festival on November 11, Alibaba Group Holding and JD.com, the nation’s leading two e-commerce platforms, accounted for 66.2 per cent and 21.4 per cent of the total online sales respectively, according to Chinese e-commerce research study firm Syntun.Vipshop ranked

No 4 with 3.4 percent followed by Suning.com’s 4.3 percent, said Syntun.Alibaba owns the South China Morning Post.