Chinese internet giant Tencent, best known for its messaging app WeChat, is further pursuing its e-commerce ambitions after announcing today that it is paying $736 million for a 19.9 percent stake in 58.com, commonly known as “China’s Craigslist.”
The agreement will see 58.com’s services being integrated into Tencent’s networks including WeChat (China has a version known as Weixin) and social platform QQ. Giving a glimpse into how the partnership will look like, a press statement revealed that users can access social tools to find recommended merchants, and communicate not only with one another but also with retailers.
This latest deal comes hot on the heels of Tencent’s investment for a 15 percent stake in e-commerce firm JD back in March, with Bloomberg pinning the deal at $214.7 million. Subsequently, JD raised $1.78 billion in a US IPO and Tencent further subscribed at IPO price for an additional five-percent stake in the company, amounting to $1.3 billion.
For Tencent, its e-commerce ambitions lie very much in its online-to-offline e-commerce ecosystem in China, which is gradually becoming a key priority.
Earlier this year, Tencent’s Chief Operating Officer Mark Ren said that Tencent’s aim is to cover much more ground in online-to-offline services than what it’s doing now.The company invested in both taxi-booking app Didi Dache and ‘China’s Yelp’ Dianping recently — the former secured a $100 million funding round from investors including Tencent in January this year, while in February Tencent took a 20 percent stake in Dianping.
In the latest deal with 58.com, Tencent said it will focus on helping small businesses communicate with their customers via channels including ‘Official Accounts’ on Weixin — for which Tencent just opened up an option for the owners to set up shop within the app — and complete transactions using Tencent’s online payment services — which Tencent just made easier with an in-app one-click payment transfer.