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Tencent boosts investments in O2O platforms on the mainland
Internet giant tries to outdo Alibaba with fresh investments in 58.com and China South City
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While Alibaba Group Holding basked in the glow of its record initial public offering, internet rival Tencent Holdings deepened its online-to-offline (O2O) retail service capabilities on the mainland with additional investments in 58.com and China South City Holdings.
Both Tencent and Alibaba are locked in a race to develop the mainland's O2O market. That effort is widely expected to help further expand the retail industry through closer ties between e-commerce and traditional bricks-and-mortar retailers and service providers.
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According to its filing with the US Securities and Exchange Commission, Tencent now owns 24.09 per cent of New York-traded 58.com which runs the mainland's biggest, Craigslist-like online classifieds site.
Barclays Research estimated Tencent spent close to US$100 million buying 2.74 million shares in 58.com after paying US$736 million in June for a 19.9 per cent stake.
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Alicia Yap, the head of China internet research at Barclays, said the increased stake would allow Tencent "to better integrate resources with 58.com and participate more directly in its strategic direction and growth strategy".
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