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February 20, 2013

Saudi Billionaire Invests $125 Million in Chinese Online Retailer 360buy

To tap one of the world’s fastest growing e-commerce markets, Saudi billionaire Prince Alwaleed bin Talal bought a stake in Chinese online retailer 360buy Jingdong Inc. The Alwaleed- controlled Kingdom Holding Co. joins a group of investors, which include Canada’s Ontario Teachers Pension Plan and some existing major shareholders.

The total amount invested was $700 million, the Beijing- based company said in an e-mailed statement to the Bloomberg (News - Alert) News. The Kingdom invested $125 million in Beijing-based 360buy

Saudi Prince Alwaleed bin Talal, who holds 95 percent of Riyadh-based Kingdom Holding, has a net worth of $29 billion.

The report indicates that the Saudi Prince, the world’s 14th-richest person, joins Baidu Inc. co-founder Robin Li and Russia’s Digital Sky Technologies in investing in 360buy, as demand grows in China’s $196 billion e- commerce market. According to industry researcher eMarketer (News - Alert) Inc., China has the highest number of people who buy goods online, nearly 220 million in 2012.

In a company statement, 360buy said, “This new investment highlights the recognition the global capital market has for 360buy’s business development.” In the same release, the Chinese online shopping mall said that it plans to use the funds to invest in new businesses and strengthen its logistics network.

According to Euromonitor International, 360buy is China’s second-largest Internet retailer with a 12.6 percent share of the market share last year, lagging Alibaba Group Holding.

The online retailer, headed by founder Liu Qiangdong, raised $1.5 billion in financing in 2011. Since then it has been attracting millions of shoppers with perks such as free shipping and quality assurance.

“This deal is in line with Kingdom Holding’s private- equity investment strategy through selecting high-growth companies potentially seeking to be listed in one of the international capital markets within three years,” Ahmed Halawani, executive director of private equity and international investment at Kingdom Holding, said in the Saudi company’s statement.

Beijing-based research firm Analysys (News - Alert) International reported that China’s online-retail transactions are projected to more than double, reaching 2.57 trillion yuan (US $412 billion) by 2015 from 1.22 trillion yuan last year.

Meanwhile, U.S. e-commerce spending through the first three quarters of 2012 exceeded $129 billion, according to comScore (News - Alert) Inc.

Edited by Brooke Neuman

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