Tencent and JD.com take on common foe Alibaba by merging e-commerce services: report

Asia’s largest internet company Tencent and China’s leading online retailer giant JD.com are “close to striking a deal” to combine their e-commerce operations, a major Chinese magazine reported.

Shenzhen-based Tencent will merge its less popular e-commerce services of buy.qq.com and yixun.com with JD.com, China’s second-largest online retailer also known as 360Buy.com, in return for the latter’s stock shares, reported Caixin, a leading Chinese mainland financial news publication.

The report, which cited people familiar with the merger, came less than a month after JD.com announced it aimed to raise US$1.5 billion (HK$11.6 billion) in an initial public offering (IPO) plan in the US, potentially making it the largest IPO of a Chinese internet company ever.

Both Tencent and JD.com were unavailable to comment on the news report on Tuesday.

The move is widely viewed as a strategic collaboration to shore up the two parties against their common competitor, Alibaba, which is by far China’s largest e-commerce company.

Online shopping sites owned by Alibaba account for half of all online retail sales and 80 per cent of consumer-to-consumer online sales, while JD.com currently has a 13 per cent share of the e-commerce market, according to data from consultancy Euromonitor.