Tencent is upping its battle with Alibaba, its closest rival in China’s Internet space, after securing a deal to buy an 11.3 percent stake in Chinese mapping service NavInfo for $187 million (1.17 billion yuan).
NavInfo provides digital maps, a location-based vehicle network, dynamic traffic information and other services. It claims to be the fourth largest company of its kind worldwide.
The deal — announced in a filing that was spotted by Bloomberg — is seemingly a response to Alibaba’s $1.5 billion deal to buy Autonavi, a larger rival to NavInfo, which was formally announced in April. It’s nearly one year to the day that Alibaba first invested in Autonavi, shelling out $294 million for an initial 28 percent share.
The deal is a defensive move against Alibaba on location based services, and may see NavInfo services integrated into WeChat, Tencent’s mobile messaging app which boasts 355 million active users worldwide, most of whom are in China. Tencent recently invested in Dianping, a service known as ‘China’s Yelp,’ which has since been integrated into WeChat, and that appears to be the model for many of its investments.
WeChat goes beyond basic mobile messaging apps by offering games, an opt-in marketing channel, and even e-commerce services like flight booking. As we noted last year, it has taken Facebook’s mantle in China. Alibaba has a rival messaging app and, despite picking up impressive early growth as Alibaba staff were told to download it, it is likely some way behind WeChat.
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