Tencent and to Invest Combined US$ 863 Mln in Vipshop Holdings


  • Tencent (0700.HK) and (JD.NASDAQ) have announced they will invest a combined US$ 863 million in China’s e-commerce platform Vipshop Holdings (VIPS.NYSE), as reported by
  • The share price of Vipshop rose more than 40% on December 18.

Why It Matters:

  • According to the deal, Tencent will invest US$ 604 million and will invest US$ 259 million at a price of US$ 13.08 per share. Taking into account previous investments, Tencent will hold a 7% stake in Vipshop and will own a 5.5% stake.
  • Vipshop has been encountering huge difficulties with business development in recent years. Alibaba (BABA.NYSE) and combined have a 83% market share of the Business to Consumer (B2C) market while Vipshop lacks a strong internet flow which the company needs to further boost its performance. The strategic partnership between Tencent and will resolve two issues simultaneously.
  • On the other hand, Vipshop’s dominant market share in women’s clothing and the niche cosmetics market provides and Tencent with great leverage for competing with the market leader, Alibaba.