Internet titan Tencent (00700.HK) insists that its deal with logistics and trade center operator South China City (01668.HK) is designed to foster online and offline trade services. But what’s the attraction, given that more than 90 percent of South China City’s revenue came from property investment last year and very little was forthcoming from its e-commerce platform?
Hong Kong Economic Journal columnist Jiang Han said the motivating force is Tencent’s desire to expand its user base. Tencent’s existing paying users are largely young gamers who don’t mind outlaying small change on mobile games but are unlikely to have the big bucks to sustain an e-commerce business.
South China City, on the other hand, has a huge roster of business clients. Teaming up with the group could expand Tencent’s user base and improve the mix immediately, giving the internet giant the push it needs to generate e-commerce income.
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