Tencent to Merge E-Commerce Platforms
Economic Observer, 3/31/12
The Economic Observer has learned that Shenzhen-based internet company Tencent (0700.HK) is preparing a major integration of its e-commerce properties. Tencent's plans call for some of the top vendors on B2C platform QQ Mall (http://mall.qq.com/; http://shop.qq.com) - those with more practical capabilities, superior customer service, strong logistics capabilities, and ERP systems connected to Tencent's own - to be "upgraded" to the new QQ Buy platform (http://buy.qq.com). More than a dozen brands have already begun preparations for the upgrade, after which they will be featured on the "Brand Street" channel of QQ Buy, and Tencent's Paipai auction site could become the C2C "Jishi" ("Market") section of QQ Buy.
Song Yang, Tencent's deputy GM for e-commerce platforms, said that in the future Tencent would have only one chief e-commerce brand: "QQ Buy."
After QQ Mall vendors are "upgraded" to QQ Buy, Song said, the site will direct e-commerce searches to two "entrances:" Paipai, which will host small and mid-sized vendors, and QQ Buy, which will host major B2C vendors. The "Jewelry" channel for QQ Buy, for instance, will be operated mainly by the Tencent-invested diamond retailer Kela Diamonds.
The greatest difficulty in simultaneously operating three platforms, Song said, is that traffic is diluted by users arriving at Tencent's e-commerce platforms through multiple points of entry - while the potential also exists for price discrepancies for the same item on multiple platforms.
Song said that QQ Buy would not invest in warehousing or logistics: rather, it will integrate vendors' own logistics, warehousing, and product information in order to unify shipping arrangements. Next, Tencent will upgrade its e-commerce platform to initiate partnerships with B2C companies in which it has invested, and other major B2C companies, with Tencent assuming greater responsibility for services. After this, Tencent will connect supply and shipping chains to other major B2C platforms.
Editor's Note: For more information on this topic, please see "Tencent to Consolidate and Link E-Commerce Platforms," MD 3/23/12 and "Update: QQ Mall Charges Annual Platform Fee," MD 3/22/12 issues.
Keywords: Song Yang e-commerce Paipai Internet B2C C2C Tencent 0700.HK QQ Buy QQ Mall
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