Tencent eyes e-commerce presence
Social networking giant moves further into Alibaba's turf with logistics investment
Mainland internet firm Tencent said it will spend HK$1.5 billion to expand its integrated logistics and e-commerce capabilities through the purchase of a 9.9 per cent stake in Hong Kong-listed warehousing and trade centre operator China South City Holdings.
The two firms said they would pursue "extensive collaboration in integrated online and offline trade services", including e-commerce, outlet services for branded goods, online payment and warehousing and logistics arrangements.
"The lining-up with South City shows that Tencent is very active in increasing its market share in e-commerce," said Ricky Lai, a research analyst at Guotai Junan International.
Tencent, the dominant player in the mainland's social networking market with products including QQ and WeChat, gained a foothold in e-commerce at the end of 2012. By the third quarter of last year it had secured a market share of 6 per cent in the business-to-customer (B2C) sector, trailing only e-commerce giant Alibaba Group's Tmall and Beijing-based Jingdong.
"As a newcomer Tencent has done pretty well in a short period of time," Lai said.