E-commerce giants team up to reach female shoppers

China's second-largest e-commerce player JD and leading fashion e-commerce platform Meili Inc announced on Thursday the establishment of a new joint venture, as JD hopes to tap more female shoppers to compete with Alibaba Group Holding Ltd's Tmall.

The new company will build and operate a social commerce platform leveraging JD's current level-one entry point on WeChat, Tencent's popular social media platform. This will enable the platform and its merchants to reach a broader customer base with innovative and interactive features.

The platform will help to attract more merchants and expand the selection of products available through JD's shopping entry point at WeChat, particularly in apparel, where Meili excels. Merchants selling through the new platform will gain access to JD's logistics network and customer service offer.

"This new joint venture combines JD's expertise in customer service, logistics, retail infrastructure, and its reputation for quality and authenticity with Meili's social commerce leadership and its ability to reach female shoppers, particularly in lower-tier cities," said Chen Qi, CEO and founder of Meili, who has been named chairman of the new joint venture.

Chen added the new platform will change the way sellers are able to target and serve a wide range of underserviced consumers in China.

Established in 2016, Meili primarily targets female customers, and includes several different platforms, such as Mogu Street and Meilishuo, among other popular shopping sites.

The new platform is scheduled to launch before next month's Spring Festival. It is expected to revolutionize e-commerce by lowering customer-acquisition and service costs for merchants, especially small and medium-sized businesses that will be able to leverage the huge volume of traffic coming through JD's WeChat shopping entry point.

Lu Zhenwang, CEO of Wanqing Consultancy in Shanghai, said: "JD has a traditional strength in the fields of consumer electronics products and home appliances, and the new joint venture will help JD tap more female shoppers and obtain more small and medium-sized merchants, in a bid to compete with Alibaba's Tmall."

Last month, JD and Tencent announced they will jointly invest $863 million in cash in Chinese online discount retailer Vipshop Holdings Ltd.

Upon completion of the transaction, Tencent and JD will take 7 percent and 5.5 percent stakes in Vipshop, respectively. Along with the equity investment, the two companies have inked a strategic cooperation agreement with Vipshop.

Last October, JD and Tencent expanded their partnership, agreeing to integrate insights on consumer behavior from Tencent's social platforms with online and offline shopping data from JD and its brand partners.