Tencent, owner of popular messaging app WeChat, and ecommerce platform JD.com have fired another salvo in their battle against China’s online retail market leader.
This week, both companies announced they would collectively pour $863 million into apparel-focused ecommerce platform Vipshop as they seek to carve out a toehold against dominant Alibaba. (Tencent is also a major shareholder in JD.com.)
Vipshop already has a decent presence among consumers in China, but it’s not overwhelming. A Q2 2017 poll of internet users in the country by ProsperChina for Fung Group found that 5% of respondents named Vipshop as their preferred retail channel—online or otherwise—for buying clothing. That still put it behind two properties owned by Alibaba: Tmall (15%) and Taobao (11%), along with offline department stores (14%) and brands’ own retail channels (14%).
Tencent and JD.com hope to leverage their expertise in other digital areas to help Vipshop improve its standing as an online retailer. For example, Tencent will aid Vipshop in creating an interface with its mobile wallet Weixin Wallet (WeChat is called Weixin in China), a move designed to smooth the flow of traffic from WeChat to Vipshop.
In addition, JD.com said it would feature Vipshop’s storefront on its mobile app and help the service hit certain gross merchandise value (GMV) targets through other means.
However, Vipshop founder and CEO Eric Ya Shen said in a statement that his company would continue to operate independently.