A PYMNTS Company

China: Fashion site Mogujie acquires Meilishuo In $3 billion deal

By  |  January 11, 2016
China’s Meilishuo.com, a fashion retailer backed by Tencent Holdings Ltd., is merging with rival Mogujie.com to form a company with $3 billion in sales, marking the latest alliance in the country’s e-commerce industry.
Mogujie founder Chen Qi will become the chief executive officer of the merged entity, and Tencent will increase its investment, according to a statement by the new company. The combined company, with sales of 20 billion yuan last year, also is valued at $3 billion, according to an e-mail sent to employees on Monday by Chen.

The deal will help the companies compete with Alibaba Group Holding Ltd. and JD.com Inc., which dominate a Chinese e-commerce industry projected to expand to $547 billion this year. Smaller operators are combining to gain scale and end costly battles for market share.

“They are following the footsteps of other company mergers as funding has become tight,” said Li Yujie, an analyst at RHB Research Institute Sdn in Hong Kong. “It’s not like they have irreplaceable resources, and hence investors are pickier in such a competitive industry.”

Full content: The Wall Street Journal

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