- 58.com (WUBA.NYSE) announced today that it has reached an investment agreement with Tencent Holdings (0700.HK), as reported by Sina Tech.
- According to the agreement, Tencent will invest US$ 200 million in 58.com‘s second-hand goods trading platform Zhuan Zhuan.
- The exact holding which Tencent will obtain through the investment was not disclosed, but 58 will remain as Zhuan Zhuan’s controlling shareholder.
Why It Matters:
- Founded in 2015, Zhuan Zhuan is an online platform for the sale of used goods. 58’s CEO Jingbo Yao previously said that although the Chinese market for the online sale of used goods is still at an early stage, it will boom in the near future as the usage of smartphones and online shopping are becoming increasingly common. Currently, Zhuan Zhuan’s biggest competitor is Xian Yu, a similar platform under Alibaba Group (BABA.NYSE).
- When the app was first launched, Zhuan Zhuan already formed a partnership with Tencent. Prior to the deal, Zhuan Zhuan’s users were able to log-in via their Wechat (a mobile instant messaging app owned by Tencent) accounts and make payments with Wechat Pay.
- After the investment, 58 and Tencent are expected to further integrate their platforms and tools for the faster growth of Zhuan Zhuan.