Selling on WeChat is becoming increasingly popular among luxury brands, and the joint venture between JD.com and Meili promises to help convert excited discussion on Mogujie and Meilishuo over the latest items into sales. Its backers included Tencent Holdings, GGV Capital, Sequoia China, and BlueRun Ventures.
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Mogujie acquired Meilishuo in a $3 billion deal in 2017. (Note: JD.com also has partnerships with Walmart and Baidu) It’s like the Avengers, all teaming up to take on Alibaba CEO Jack Ma. The strategy seems clear: to join forces to compete against Alibaba’s Taobao and TMall for a larger share of China’s lucrative e-commerce market. The relationship between JD.com and Tencent grew even closer after the two companies invested in luxury e-commerce platform Vipshop together last month. The two companies also share data to better target consumers.
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It is also JD.com’s largest shareholder, with a 20 percent stake in the company. Tencent still relies on JD.com for a significant chunk of the transactions made through its payment service, WeChat pay, and is no doubt taken with JD.com’s powerful delivery and logistics system. WeChat’s owner, Tencent, is a major investor in Meili, having increased the stake it already had in Mogujie when it bought out Meilishuo. The decision to establish the venture not as an independent site but a WeChat mini-program shows not only how important WeChat has become, but also how close all three companies have grown. Mogujie is a buyer-based social commerce site focused on women’s fashion in China.