58.com announces US$736m investment from Tencent and WeChat integration

Tencent Holdings has moved a step closer to narrowing the gap with e-commerce giant Alibaba Group in their race to build a highly integrated online-to-offline retail network on the mainland, following its US$736 million investment in 58.com.

That deal announced last Friday will provide Tencent, Asia's largest listed internet company, with a 19.9 per cent equity stake in New York-traded 58.com, which runs the mainland's biggest, Craigslist-like online classifieds site serving local merchants and consumers.

A Barclays report viewed Tencent's investment in 58.com as a means to further strengthen the Shenzhen-based company's "mobile O2O e-commerce ecosystem".

Alicia Yap, the lead author of the report and head of China internet research at Barclays, said it was "highly likely that Tencent could offer and integrate 58.com services" on its popular WeChat mobile-messaging platform, which operates under the Weixin brand on the mainland and has more than 400 million users around the world.

"We believe 58.com may develop some tailor-made products and services specifically to fit the WeChat user base," Yap said.

Based in Beijing, 58.com's operations support both business-to-business and consumer-to-consumer transactions. The company's listings content - covering diverse categories such as housing, jobs, used goods, cars, pets and tickets for shows - is also highly compatible with online platforms designed for smartphones, such as WeChat.