China’s second-largest e-commerce company JD.com and Tencent have come together to make an investment of US $ 863 million in Vipshop Holdings Limited, a leading online discount retailer for fashion and accessories brands such as Lacoste in the country.
Tencent and JD.com will invest US $ 604 million and US $ 259 million for a 7 and 5.5 per cent stakes, respectively. The transaction is likely to get its final shape soon, subject to customary closing conditions.
Gaming and messaging company Tencent’s President Martin Lau said that they are eager to help Vipshop by providing its audiences, marketing solutions, and payment support to serve the rising middle-class of China. JD.com will also provide Vipshop a lucrative space on some of its shopping portals.
The collaboration between JD.com and Tencent has intensified the competition in the Chinese e-commerce market where Alibaba Group is JD’s biggest rival.
Eric Ya Shen, Vipshop’s Co-founder, Chairman of the Board of Directors and Chief Executive Officer feels delighted about the latest strategic cooperation relationships with Tencent and JD.com. He said this is certainly a significant move for the company as well as other e-retail and internet-related industries in China.
JD.com Inc. has been extensively focusing on the move to take on Alibaba Group. The company recently launched its first luxury e-commerce platform Toplife to serve the high-end consumers in the country.
It has also inked a deal with Thailand-based retailer Central Group for a US $ 500 million (US $ 250 million each) joint venture in September this year with an aim to expand its reach in the Southeast Asia region through this e-commerce and financial technology (finetech) venture.
