An arms race between the two most powerful Internet companies in China has escalated again, with one of them, Tencent, announcing an investment that pushes it further into e-commerce — territory long controlled by its rival, Alibaba.
Tencent said on Wednesday that it would pay about 1.5 billion Hong Kong dollars, or $193 million, for a nearly 10 percent stake in China South City Holdings, which operates warehouses and factory outlet malls and provides a variety of other logistical services to retailers. Both companies' shares are listed in Hong Kong.
(Read more: Bitcoin safe despite Alibaba ban: BTC China)
Until recently, Alibaba and Tencent seemed largely content to develop their own areas of expertise without moving too aggressively onto each other's turf. Alibaba owns e-commerce sites like Taobao and Tmall, while Tencent operates messaging services like QQ and WeChat.
But over the last year or so, with Alibaba positioning itself for an initial public offering and Tencent eyeing the lucrative earnings from the boom in online retailing in China, the gloves have come off.