Tencent, JD.Com To Invest $257M In Chinese Retail Chain Better Life In Continued Offensive To Alibaba

Tencent Holdings Ltd. and JD.com Inc. plan to invest US$140 million and US$117 million respectively for minority stakes in Chinese retail chain Better Life Commercial Chain Share Co., Ltd., in the latest transaction after a string of deals in the retail and e-commerce sector for the pair.

Including the newest investment revealed in a regulatory filing yesterday, Tencent and JD.com have been involved in deals worth nearly US$9 billion in total in the past three months in the retail sector, reflecting their determination to take over market share from rival and current leading player Alibaba Group.

A Tencent subsidiary is buying a 6% stake in Better Life for RMB886.9 million (US$140 million), and a subsidiary of JD.com is to take a 5% stake for RMB739.1 million (US$117 million), according to a filing to the Shenzhen stock exchange filed by Better Life on Friday.

The three companies plan to team up to pursue smart new retailing business models and to build a digital ecosystem in online and offline retail.

The transaction values Better Life at RMB17.11 billion (or US$2.70 billion). Hunan province-based Better Life, operating 592 stores in China, earned RMB37 billion (US$5.8 billion) in 2016.

Earlier this month, Tencent led a RMB10 billion (US$1.59 billion) deal to invest in Chinese menswear group Heilan Home Co., Ltd.

Last December, Tencent bought a 5% stake in Yonghui Superstores, currently valued at RMB5 billion (US$789 million) and made a joint investment with JD.com, Inc of approximately US$863 million in Vipshop Holdings Ltd.

In addition, Tencent and Shanghai Stock Exchange-listed Yonghui Superstores signed a term sheet with Carrefour regarding a potential investment in Carrefour China, but there is no further development on that deal yet.

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