Chinese online giant Tencent Holdings and internet marketplace JD.com have lead an $863 million investment in apparel platform Vipshop, in a bid to boost competition in the nation’s hot e-commerce market.
That equates to a stake of approximately 7% and 5.5%, respectively. The transaction is expected to close in the near future, subject to customary closing conditions.
Dissecting the tie-up, JD.com’s CEO, Richard Liu mentioned VipShop’s flash sale and apparel business as key strengths for his firm’s bottom line.
“This partnership will further extend the strong inroads that we have made with female shoppers, and will expand the breadth and reach of our fashion business,” said Liu.
Tencent will bring its marketing solutions and payment support to the mix, and be able to provide assess to apparel purchases to its app users.
“We already see substantial demand from our users to discover, discuss and purchase branded apparel in our applications, and we believe that connecting our users more deeply to products on Vipshop’s platform will enrich their online experiences while benefiting Vipshop,” saidMartin Lau, President of Tencent, in a statement.
On the receiving end of the close-to-a-billion- dollar investment, Vipshop co-Founder and Chief Executive Officer, Eric Ya Shen hailed the backing as an “important event” for Chinese internet and e-commerce, adding that all three firms will form a “strategic cooperative alliance” to benefit internet users and consumer.
“We will develop a holistic cooperation with Tencent on the Weixin platform and expand our strategic alliance with Tencent into more and broader areas,” said Shen, in a press release.
“We will explore win-win opportunities in multiple areas with JD.com, including establishing a strategic alliance in collaboration with brand suppliers, and an on-line traffic alliance.”
The boss also reaffirmed VipShop’s position as remaining independent despite the backing from the two online giants, adding it plans to use the funds to strengthen product categories such as fashion and cosmetics and target the female customer.
“We will continue to operate as an independent e-commerce platform and further deepen and enhance our leading e-commerce capabilities in fashion (including apparel, shoes, bags and accessories) and cosmetics categories as well as our strong female user base, thereby offering higher value and better user experience to our customers.”