Major e-commerce platform JD.com will unload its entire 21% stake in Chinese online travel website Tuniu for about 458 million yuan ($65 million), losing a $500 million bet as a recovery looks elusive for a sector decimated by the pandemic.
JD.com and Tuniu announced the sale to travel company Caissa Sega Tourism Culture Development Group on an unspecified closing date.
Tuniu was the domestic industry leader, with a 28% share of the resort-focused Chinese online travel market in the fourth quarter of 2018, according to research firm Analysys. But its net loss widened to 200 million yuan in the first quarter of 2020 from the year-earlier 150 million yuan.
JD.com spent half a billion dollars total to acquire and gradually increase its Tuniu stake in 2014 to 2015.
Coronavirus lockdowns and travel restrictions led to canceled trips and vacations, cutting deeply into revenues at such online travel companies as Trip.com Group.
JD.com generated record-high sales in the first three months of this year as people stayed inside and shopped online. The Beijing-based company, listed on Nasdaq, debuted in Hong Kong last week through a secondary listing as it looks to expand operations.
This article was first published in Nikkei Asian Review.