Tencent still gung-ho on India, invests $62.8 million in Flipkart

Chinese company Tencent’s PUBG is banned in India. And there is heightened tension between India and China at their borders. But that has not stopped Tencent from investing in Flipkart, one of India’s top e-commerce marketplace.

The gaming and social media biggie Tencent has put in $62.8 million into Flipkart’s $1.2 billion investment round, as per regulatory filings made by e-commerce platform’s Singapore-based parent entity Flipkart Pte.

This investment is believed to be a part of Flipkart’s $1.2 billion round that was led by Walmart in July.

“There is the possibility that Tencent’s investment is the first money in, as part of this larger round involving Walmart and other shareholders,” said Paper.vc, a business intelligence platform.

Tencent is the second-biggest shareholder in the e-commerce marketplace. Its stake is now increased from 5% to 5.34%.

Tencent not giving up on India

It is interesting that Tencent is increasing its stake in a popular Indian company notwithstanding the current border tensions between India and China.

Tencent also seems to have taken in its stride the ban on its PUBG Mobile. There were reports that Tencent wants to distance itself from PUBG Mobile to keep the Indian regulators in good humour. It was also rumoured that Tencent was selling a part or all of its holding in Indian gaming platform Dream11.

India has also amended its FDI policy to stop investments in Indian firms and startups via the automatic route from entities based in bordering countries, especially with an eye on China.

Considering all this, Tencent seems to have chosen Singapore to bypass the new norms and compliance for its latest investment in India.

Despite market expectations, Tencent, quite evidently, has not given up on its India plans. It recently invested in music and podcast streaming app Gaana (owned by Jio). This investment was done via debt through its European subsidiary Tencent Cloud. 

Tencent has also chipped in with investment in bookkeeping software firm Khatabook and Pratilipi.

Flipkart to tap overseas market?

Meanwhile, the Economic Times is reporting that the Walmart-owned Flipkart is preparing to tap the public markets as early as 2021, in the US or Singapore. The e-commerce major is valued at $50 billion, as per the report. 

Be that as it may, the new funds from Tencent and others is important for Flipkart as the company is gearing up for its best two business months in the year – October and November. The festival months are crucial for online platform and they usually do their best business in the entire year in that period.

During last year’s Big Billion Day sales, Flipkart had reported more than a million shipments from the Kirana stores.

Earlier in August, Flipkart had rolled out ‘dark stores’, which are essentially shops or outlets operated to service customers in nearby localities, across several cities in India. These dark stores are quintessentially warehouses.  In the case of JioMart, it will also use its own Reliance Retail stores. 

Also Publish AT: https://www.techradar.com/news/tencent-still-gung-ho-on-india-invests-dollar628-million-in-flipkart

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