Tencent-led group to invest US$1.6bil in menswear firm

HONG KONG: Tencent Holdings Ltd is leading a deal to invest 10 billion yuan (US$1.59bil) in Chinese menswear group Heilan Home Co Ltd, upping a retail rivalry with fellow internet giant Alibaba Group Holding Ltd, sources with knowledge of the matter said.

China’s second-largest e-commerce company JD.com Inc and online clothing platform Vipshop Holdings Ltd will also be among the group that plans to acquire less than 10% of the company for five billion yuan, one source said.

Another five billion yuan would help set up an industrial investment fund to focus on deals that fit with Heilan’s business, the person said, requesting anonymity because they were not authorised to speak to the media.

Heilan had a market value of about US$8.13bil as of Monday, when it halted shares from trading, pending deal announcements.

Tencent, JD.com and Vipshop declined to comment.

A Heilan spokesman was not immediately available to comment.

The proposed deal, which could be announced as early astoday, extends a recent push by Tencent, China’s biggest social network and gaming company, into bricks-andmortar retail to further compete with Alibaba.

Heilan which has clothing brands such as HLA and SANCANAL, has been a long-time partner of Alibaba’s online marketplace Tmall.

But last month Tencent, which has a market capitalisation of US$563bil, said it would invest 4.2 billion yuan for a stake in Yonghui Superstores. It is also looking to take a stake in the China business of French supermarket retailer Carrefour.

The recent moves reflect a wider, long-running stand-off between Tencent and Alibaba, which have made competing investments in areas as diverse as bike-sharing apps, food delivery and gaming.

JD.com, in which Tencent is a top-10 investor, traditionally leads against Alibaba in online retail sales of electronics and home appliance products, but lags behind in the fashion business.

Tencent and JD.com last month jointly made an US$863mil investment in Vipshop, in a bid to tap the country’s young female shoppers and gain access to consumer and transaction data to help them compete with Alibaba’s online payment platform Alipay. — Reuters