China’s Tencent, JD.com invest $863m in online retailer Vipshop

REUTERS/Aly Song

Chinese social media firm Tencent Holdings Ltd and e-commerce platform JD.com Inc on Monday said they will jointly invest $863 million in Chinese discount online retailer Vipshop Holdings Ltd.

Tencent will invest $604 million in exchange for a 7 percent stake in Vipshop, while JD.com will invest $259 million for 5.5 percent. The investment amounts represent a 55 percent premium over Vipshop’s closing share price on Friday of $8.44.

“We look forward to providing Vipshop with our audiences, marketing solutions, and payment support to help the company provide branded apparel and other product categories to China’s rising middle class,” Tencent President Martin Lau said in a statement.

The deal represents a major alliance in China’s e-commerce market, where competition for retail brands between JD.com and Alibaba Group Holding Ltd has grown increasingly fierce.

It also comes as Tencent, which derives most of its profit from gaming and social media, pushes into retail, leveraging its relationship with JD.com and popular app WeChat. Last week it said it would buy five percent of Chinese department store operator Yonghui Superstores Co Ltd.

Tencent, Asia’s most valuable company with a market capitalisation of $473 billion, is a major stakeholder in JD.com, and the two have recently upped cooperation on data and payments to better compete with Alibaba.

JD.com Chief Executive Richard Liu recently said roughly 100 Chinese apparel merchants had left the firm’s platform in the last quarter due to what he called “coercive” tactics by competing platforms.

“The strength of Vipshop’s flash sale and apparel businesses, as well as its outstanding management team, create clear and strong synergies with us,” Liu said in the statement.

After the Vipshop deal closes, Tencent will allow Vipshop to capture traffic from WeChat, and JD.com will integrate Vipshop features into its own app and assist the firm in reaching sales targets, the companies said.

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Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.