Tencent Purchases Nearly 20% Stake Within 58.com.

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Tencent Purchases Nearly 20% Stake Within 58.com.

58.com Inc, China’s largest online marketplace serving local merchants and consumers, and Tencent, a leading provider of comprehensive Internet services in China, today jointly announced that Tencent has agreed to invest US$736 million in exchange for approximately 19.9% equity interest in 58.com on a fully-diluted basis.

Purchase.

Tencent has agreed to purchase 36,805,000 Class A and B ordinary shares at a purchase price of US$20 per ordinary share, corresponding to US$40 per American Depositary Share, each representing two ordinary shares. In addition, 58.com will use part of the proceeds from this transaction to repurchase 27,603,750 ordinary shares from existing pre-IPO shareholders.

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.

Tencent.

For Tencent, the investment further strengthens its expanding O2O eCommerce 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 management and improved consumer targeting via location-based functions

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Kevin C is passionate for tech world wide. He was apart of Qbox media and currently is apart of a UX firm based in Hong Kong.

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