Tencent acquires e-commerce site

Technology company Tencent has invested US$736 million to take 19.9 per cent equity interest in 58.com.

58.com operates an online marketplace serving local merchants and consumers, on both its www.58.com website and mobile applications.

Tencent and 58.com have agreed to use each other as the preferred partner in local services. Both companies will jointly build out next generation online-to-offline (O2O) services leveraging the combined strengths of their respective platforms.

58.com will solidify its leading position in local services by capturing traffic from Tencent’s various online properties such as QQ, Weixin, QQ.com, and QQ browser. Integrating 58.com’s services into these properties will further expand 58.com’s user base, improve the user experience by allowing users to access social tools to find recommended merchants, and help users improve the level of communication between each other and with merchants.

For Tencent, the investment further strengthens its expanding O2O e-commerce ecosystem in China, which also includes Dianping, Didi Dache, JD.com and Leju. Its large social user base will benefit from the broadening local services offering, select quality vendors or merchants leveraging social sharing online and enjoy an enhanced O2O user experience.

Tencent will help small and mid-sized enterprises and other merchants communicate with consumers via Weixin Official Accounts system or Enterprise QQ system, and complete transactions using Tencent’s online payment solutions. Merchants will benefit from better customer relationship maangement and improved consumer targeting via location-based functions.

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