China's Online Giants Alibaba And Tencent In Internet Turf War

Alibaba and Tencent are locked in a battle for dominance in the world’s biggest market of Online users after Tencent announced a deal to pay $215 million for a 15 percent stake with plans to take another 5 percent after the IPO to JD.com, formerly known as 360buy.com, the country’s second e-commerce company, behind Alibaba.


The deal will give JD the money and visibility necessary to run Tencent’s ecommerce operations successfully and a backer with the muscle to help it make the most of a logistics infrastructure that Alibaba lacks.

Tencent, founded by the billionaire Pony Ma (no relation to Jack) is China’s champion of social messaging and online games, It dominates the social media market, with a market value of about $150 billion, It operates Weixin, or WeChat, a popular messaging service similar to WhatsApp, .

Alibaba, founded by the billionaire Jack Ma, is Chinese e-commerce market leader owns shopping sites, Taobao.com and Tmall.com the two main online retailing platforms the equivalent of Amazon and eBay rolled into one.

Lately, each company has been eyeing the other’s turf, relying on a strategy that boils down to buying into your competitor’s competitor.

At the end of 2012 Alibaba launched its Laiwang smartphone messaging app, with functions similar to WeChat. The company also bought an 18 per cent stake in Sina Weibo, the mainland's answer to Twitter, for US$586 million last year.

On Aug, 2013 Alibaba blocked merchants selling goods on its sites from using rival WeChat apps. The ban limits Tencent’s ability to draw users to its own payment systems, which it introduced for WeChat.