Tencent makes $193M investment to beef up e-commerce biz
China's Tencent Holdings has announced plans to invest HK$1.5 billion (US$193.45 million) for a 9.9 percent stake in a logistics services provider, as it looks to beef up its e-commerce business.
The investment in China South City Holdings, which is listed on the Hong Kong stock exchange, will provide a logistics and trade delivery network that Tencent can now potentially tap to compete against archrival, Alibaba Group, and grab a bigger share of the country's 608 million online shoppers.
According to a Bloomberg report, the Shenzhen-based company will also work with China South City to assist small and midsize organizations keen to move their business online.
As China's e-commerce market continues to expand, so too are the efforts of Alibaba and Tencent to bolster their mobile- and e-commerce services. The country's e-commerce revenue is projected to reach 3.3 trillion (US$539 billion) by 2015, bypassing the U.S. to become the world's largest e-commerce player.
Alibaba last week said it would return 70 percent of sales generated from mobile games to developers, in a move squarely targeted at current online games market leader, Tencent, which leverages its instant messaging app WeChat to deliver mobile games to its 270 million monthly active users.
Not to be outdone, Tencent last week annoucned it was an investor in Didi Taxi's US$100 million fundraising campaign, as part of efforts to expand its m-commerce business. WeChat of the Chinese taxi reservation mobile app, which 22 million users generated over 350,000 bookings a day in December, will be able to pay for their fares using Tencent's Weixin Payment mobile platform.