Economy· Retail· TMT

JD to acquire 9% stake of Beijing Digital Telcom for USD 27.4 mln

minutes 2019/08/01 05:58:53
e-commerce , JD, Pinduoduo, Alibaba, NASDAQ

Aug 01, 2019 (China Knowledge) - JD. com (JD) has reached a share purchase deal with Beijing Digital Telecom (06188). JD is to acquire a 9% stake in the Chinese electronics distributor for USD 27.4 mln in cash.  The two firms will join hands in fields such as finance, logistics, and Cloud services.

After Alibaba (BABA), NASDAQ –listed JD is China's second-largest e-commerce company. The profit of JD for the first quarter of 2019 increased by 387% to USD 1 bln. The e-commerce giant has placed more importance to grow its presence in offline business and smaller cities due to market saturation in bigger cities.

Hong Kong-listed Beijing Digital Telecom also shares the same strategy with JD. According to the firm's 2018 annual financial report, Beijing Digital Telecom intends to expand its business in smaller cities and rural areas. The company, founded in 2001, has opened 1,600 stores, including franchises in China. The electronics distributor's main products are electronics and home appliances.

Pinduoduo (PDD) only takes four years to climb up to be the third-largest e-commerce platform in China, as the company has unleashed great shopping potential in smaller cities and rural areas. The success of Pinduoduo pushes JD and other e-commerce companies to seek more opportunities in smaller cities.

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