Tencent buys 20pc stake in consumer review site Dianping
Mainland social media leader Tencent Holdings has bought 20 per cent of Dianping, China's counterpart to the American review site Yelp, Tencent said in a filing to the Hong Kong stock exchange yesterday.
The statement did not say how much Tencent paid for the stake although mainland papers reported it ranged from US$400 million to US$500 million.
"We are excited to bring Dianping's breadth of local life content and services on to our platforms, providing QQ and Weixin users with integrated online-to-offline experiences, especially on mobile devices," said Martin Lau, president of Tencent.
"Co-operating with Tencent will help us provide better user experience and merchant service capability, accelerating our national expansion, especially in tier 3 and tier 4 cities," added Dianping chief executive Tao Zhang. Dianping has nearly 100 million active users across 2,000 cities in China, according to the firm.
China media has been reporting that Dianping is planning an initial public offering within the next five years, possibly in the United States.
The two companies said they will co-operate by integrating Dianping's content, user base and offline merchant network accumulated over the past 10 years with Tencent's social communications platforms, such as QQ and Weixin "to build the leading online-to-offline ecosystem in China".
Liu Xingliang, the chairman of Hongmai Software, a Beijing-based internet data analysis firm, said it is a win-win collaboration. "The offline resources of Dianping will provide a base for Tencent to offer local life services in the future."
He said what lured Dianping into the deal was WeChat, the popular instant messaging app for mobile devices developed by Tencent. "Dianping currently is more like a Yellow Pages while the review business hasn't been well developed," Liu said.