Tencent shares rally on group-buying website venture
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Shares of Chinese Internet giant Tencent surged Monday with the opening of a new joint venture with US group-buying website Groupon.
The launch of bargain website GaoPeng.com boosted Tencent Holding stocks by 3.2 percent to finish at 206 Hong Kong dollars in Hong Kong.
GaoPeng.com, co-funded by Groupon, Tencent Collaboration Fund, and Yunfeng Capital, is a joint venture by the two Internet giants to cash in on the world's largest online population.
It is attracting registration by bargain-conscious Chinese with the promise of rock-bottom prices on a range of consumer goods and services, available from March.
"GaoPeng will learn from the international group-buying experience of Groupon while focusing on the local market in China," said head of GaoPeng, Yun Ouyang, in a statement.
The new website also demonstrates the ambition of Tencent, China's largest provider of integrated Internet services, to tap into the country's growing group-buying market.
The Shenzhen-based company in January opened its group-buying platform on QQ, an instant messaging service boasting 600 million registered user IDs in China.
Though Tencent made no comment on the joint venture, observers say the collaboration will shake up China's group-buying market.
"The participation of Tencent will surely fuel the already fierce competition," said Wu Yixin, researcher with the Shenzhen Academy of Social Sciences.
"Tencent's huge pool of users, once introduced to the new concept, will also create great opportunities for the entire business," said Wu.
China has the world's biggest Internet population with more than 457 million users, many of whom are willing and able to spend online. Last year, on-line shopping in China reached 520 billion yuan, almost double the figure of 2009.
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