Shares in China’s Bitauto reached an all-time high after JD.com and Tencent confirmed a $1.3bn investment in the Chinese automotive e-commerce platform.
Taking on Alibaba, which currently dominates Chinese online marketplaces, the latest deal will also enable Bitauto to exclusively use the new and used car channels on JD.com’s ecommerce platforms.
JD.com founder, chairman and chief executive officer Mr. Richard Liu said: "This landmark deal will bolster Bitauto’s position as China’s leader in the auto e-commerce space, while providing JD.com customers an outstanding gateway to the car market."
"This investment is a major step forward in our long-term strategy of partnering with industry leaders in the vertical categories most important to our customers."
Upon the completion of the deal, expected by the first half of 2015, JD.com and Tencent will hold 25% and 3.3% of Bitauto’s outstanding shares respectively, with JD.com getting one seat on Bitauto’s board.
Tencent president Martin Lau said: "With the pooled auto e-commerce resources of Bitauto and JD.com and our extensive user base and analytics and auto-related media assets, we collectively can build an efficient online platform to facilitate online automotive transactions and provide one-stop financing solutions to auto buyers in China."
Both companies will also invest $250m in Bitauto unit YiXin Capital, gaining 17.7% and 26.6% of YiXin Capital respectively.
Bitauto chairman and chief executive officer William Bin Li said: "As China’s leaders in world-class e-commerce, social media and big data, we could not ask for partners more ideally positioned to support Bitauto than JD.com and Tencent as we build out China’s leading platform for automotive e-commerce."
"In the months ahead, we will aggressively invest to solidify Bitauto’s industry leadership and build market share. Our goal has always been to provide China’s new and used car customers with the best possible car purchasing experience."
