Tencent purchases 15% stake in JD.com, aims to compete with Alibaba more aggressively
Tencent, one of the largest Internet organizations in China, has announced that it will purchase a 15% stake in JD.com, a prominent e-commerce firm. The move comes as Tencent prepares to compete with Alibaba more aggressively. Both Tencent and Aliabab have plans to dominate the mobile commerce field, and both intend to fight for that position. Tencent’s stake in JD.com may help give it the edge over Alibaba in the near future.
E-commerce firm continues to attract major attention from investors in China and the US
JD.com plans to launch an initial public offering in the coming months and is aiming for a $1.5 billion U.S. listing of its shares. The company currently stands as China’s second largest e-commerce firm, with the first being Alibaba. JD.com’s position in the e-commerce world has elicited a great deal of interest from Tencent, which has primarily been involved in the mobile space. As Tencent becomes more focused on mobile commerce, it is looking for ways to make mobile devices more prominent online shopping and purchasing tools.
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JD.com to be integrated into the popular WeChat application in order to better facilitate mobile commerce
Per an agreement between the two companies, JD.com will take control of an old and unsuccessful e-commerce venture that Tencent currently owns. The venture will become wholly owned by JD.com, which is expected to rebrand the venture and incorporate it into its e-commerce portfolio. Tencent will be integrating JD.com into the popular WeChat application, allowing users to shop online and purchase products from the e-commerce firm.
China’s e-commerce market continues to show signs of healthy growth
China’s e-commerce market is expected to surpass the $180 billion market this year. This growth is being powered by increased Internet use among consumers throughout the country. Middle class income is also growing, allowing consumers with more flexibility when it comes to shopping. Many consumers in China prefer to shop online because it allows them to avoid visiting physical stores. Those with commutes typically favor mobile commerce because of its convenient nature.