![](https://cdn.i-scmp.com/sites/default/files/styles/768x768/public/d8/images/canvas/2022/06/30/c65ee277-19e5-4f20-842a-649e71ad5e30_7dada85a.jpg?itok=s2UqF-Hd&v=1656565519)
JD.com extends access to Tencent’s WeChat for three years with US$220 million in stock
- JD.com is keeping its preferential access to WeChat’s 1.29 billion users, extending a partnership with Tencent that gives it a short cut on the platform
- The new stock issuance comes after Tencent offloaded US$16 billion in JD shares in December, reducing its stake to 2.3 per cent
The renewed cooperation will preserve short-cut access to JD.com on Tencent’s dominant chat app, which has 1.29 billion monthly active users, as the companies continue to collaborate in marketing and advertising, technology services and other fields, the e-commerce firm said in an announcement on Wednesday.
Under the new deal, JD.com promised to issue shares worth US$220 million to Tencent over the three-year period.
“The two parties will leverage this mutually beneficial partnership to provide a better and more convenient shopping experience for users,” JD.com said in the announcement.
Tencent first invested in JD.com in 2014, after retreating from its own e-commerce meant to compete with China’s No 1 player in the market, Alibaba Group Holding, owner of the South China Morning Post. At the time, Tencent acquired a 15 per cent stake in JD, which took over the operations of Tencent’s QQ Wangguo and PaiPai shopping platforms.
The companies’ ties grew closer as competition with Alibaba intensified, leading to JD.com enjoying prominent positioning on WeChat. Tencent’s multipurpose super app is an important gateway to many digital services in China, including shopping.
When WeChat users select the option for “shopping” from the app’s Find page, they are automatically directed to JD.com, giving it a so-called Level 1 access point. JD is the only e-commerce company to enjoy that level of access on the app. It is also available through WeChat’s Service page, where it is listed among other online shopping sites such as Pinduoduo and VIPshop, two other Tencent partners. Other online services for things such as food delivery and movie ticketing are also found in this area.
While most of JD.com’s traffic comes from its own app, the traffic from WeChat’s short-cut access offers a high return on investment, Jefferies analyst Thomas Chong wrote in a note on Wednesday.
“We believe the renewal underlines the win-win cooperation between JD and Tencent in the long term,” Chong said.
JD.com’s shares rose 1.19 per cent from the previous close to HK$254.8 by mid-day Thursday, while Tencent continued its losing streak this week with a 1.64 per cent fall to HK$359.
![](https://assets-v2.i-scmp.com/production/_next/static/media/wheel-on-gray.af4a55f9.gif)