China-based retailer and internet value-added services provider Tencent have entered definitive agreements to invest nearly $863m to acquire a stake in online discount retailer Vipshop.

According to the agreement, Tencent has agreed to invest approximately $604m, while will be investing nearly $259m for subscribing newly issued Class A ordinary shares of Vipshop.

Vipshop co-founder and chief executive officer Eric Ya Shen said: “I am truly delighted about Vipshop’s new strategic cooperation relationships with Tencent and This undoubtedly is an important event for Vipshop, as well as China’s e-commerce and internet industries.

“This partnership will further extend the strong inroads that we have made with female shoppers and will expand the breadth and reach of our fashion business.”

“We, together with Tencent and, will leverage our respective strengths to form a strategic cooperative alliance aiming to achieve a deep, win-win cooperation and to benefit internet users and consumers.

“We will develop a holistic cooperation with Tencent on the Weixin platform and expand our strategic alliance with Tencent into more and broader areas.”

The deal is expected to close in the near future, subject to customary closing conditions.

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Upon the closing, Tencent will own a 7% stake, while will be holding a 5.5% stake in Vipshop’s total issued shares for a lock-up period of two years.

During the lock-up period, Tencent and will have the right to appoint a director and an observer to Vipshop’s board of directors.

After competition of the lock-up period, Tencent and hold approximately 12% and 8%, respectively in Vipshop’s issued shares. chairman and CEO Richard Liu said: “The strength of Vipshop’s flash sale and apparel businesses, as well as its outstanding management team, create clear and strong synergies with us.

“This partnership will further extend the strong inroads that we have made with female shoppers and will expand the breadth and reach of our fashion business.

“We continue to add the top-notch partners to complement’s core strengths, ensuring that JD and our partners provide the best customer experience for every shopping need.”