Tencent and jingdong a $863 million stake in Vipshop

Release Time：2017-12-20

Chinese internet giants Tencent and JD.com have agreed to invest $863m into discount online retailer Vipshop.

Gaming and messaging company Tencent and ecommerce company JD.com will buy Vipshop Class A ordinary shares for $65.40 a piece, the equivalent of $13.08 per American depositary share, Vipshop said in a statement. That represents a 55 per cent premium over the closing price of the shares on Friday.

Tencent will buy newly issued Class A shares for $604m and JD.com is investing $259m. After the deal closes, Tencent will hold a 7 per cent stake and JD.com a 5.5 per cent stake in Vipshop.

Under the agreement, Vipshop will be able to attract traffic from Tencent’s social media app Wechat and to appear on the main page of JD.com’s mobile app and Wechat page.

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Richard Liu, chairman and CEO of JD.com, said the agreement with Vipshop would help the company “further extend the strong inroads that we have made with female shoppers, and will expand the breadth and reach of our fashion business”.

The deal is expected to close in the “near future”, Vipshop said.

Meanwhile, Tencent has also agreed to acquire a 5 per cent stake in China’s Yonghui Superstores for Rmb4.22bn ($638bn), the supermarket operator said on Friday. The deal marks the latest move by a Chinese internet company into bricks-and-mortar retail.

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