Chinese based internet and Ecommerce firm Tencent is reportedly buying a stake in local online marketplace JD.com.
Continuing its rivalry with Chinese Ecommerce juggernaut Alibaba, Tencent might soon have a stake in Alibaba’s Tmall’s main competitor. JD.com is China’s second largest online marketplace trumped solely by Tmall. If the rumors are true, Tencent will find itself head to head with Alibaba in its most lucrative market.
The report of the acquisition comes from the Wall Street Journal, where “a person familiar with the matter” mentioned Tencent has appointed Barclays to advise the firm on taking a stake of JD.com.
Tencent has been on Alibaba’s heels for some time. The firm’s social messaging application WeChat has transformed from a simple IM platform to become one of the most used mobile payment applications in China, challenging Alibaba’s mobile wallet Alipay. The firms are also sparing for the mobile taxi hailing segment, with both companies offering similar apps.
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This would not be Tencent first foray into the online marketplace segment. Tencent owns and operates QQ Buy and 51Buy e-stores. However, with stiff competition from the likes of Alibaba, the tech giant has found more success in mobile, social media, and gaming.
JD.com is soon planning an IPO and was estimated at $1.5 billion. JD.com has over 35.8 million active users, 25.7 million products for sale, and raked in close to $16 billion in sales throughout 2013.