Alibaba’s biggest rival in China, Tencent, has just led a $350 million funding round for a startup called Koudai Gouwu that could challenge Alibaba where it’s weakest: mobile shopping.
Koudai Gouwu (“Pocket Shopping) is a mobile marketplace that lets merchants sell direct to buyers, generating revenue lead-generation fees and sales commissions — and reportedly handling more mobile-commerce traffic than Alibaba’s flagship Taobao service. While Taoboa dominates PC-based E-commerce in China, it lags badly in mobile.
Tencent contributed $145 million to the Series C round, in exchange for the chance to increase the integration between Koudai Gouwu and WeChat, Tencent’s mobile-based service that dominates social networking in China.
Other investors included Tiger Fund, H Capital, Vy Capital, Falcon Edge, and DST Group, TechCrunch reported on Thursday (Oct. 23). The companies did not reveal the valuation for Koudai Gouwu after the round or how much equity was exchanged.
In practice, the other investors are bystanders — the investment round is clearly part of Tencent’s ongoing battle against Alibaba, in which Tencent is ahead in mobile and social and Alibaba is ahead in E-commerce and payments, with each rival trying to gain ground where it’s weaker. Both companies recently acquired banking licenses in China, and have gone head to head in areas as diverse as investment services and taxi hailing apps.
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