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.
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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.
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