Alibaba and Ant Financial Service Group will each invest USD 483.3 million and take 50 per cent stakes in mobile shopping and dining information app Koubei, Alibaba said in a statement emailed to AFP today.
Koubei connects users to businesses and service providers such as restaurants in their immediate area, and will initially focus on food and beverages before expanding into offline retail and healthcare.
Alibaba's rival Chinese Internet giant Tencent has already established a foothold in the field. It acquired 20 per cent of local service provider Dianping in February last year, and followed up four months later by spending USD 736 million for a similar stake in 58.Com, another such firm.
"Establishing it as an independent business shows that Alibaba is putting a lot of emphasis on it."
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Koubei is not a brand-new platform and was previously operated through Alibaba's consumer-to-consumer platform Taobao.
"Consolidating our resources under Koubei allows us to capture opportunities that navigate both the offline and online markets," Samuel Fan, CEO of Koubei, said in the Alibaba statement.
Ant Financial owns Alipay, a Paypal-like service which handles around 80 per cent of online payments in China.
It has closed a private placement that would value it at more than USD 40 billion, two sources on Friday told Bloomberg News, which added Ant Financial was planning an initial public offering next year.
Alibaba's Tmall.Com is believed to command more than half the Chinese market for business-to-consumer transactions while its Taobao platform holds more than 90 per cent of the consumer-to-consumer market in China.