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China Goes Public, and China Has a New Internet Billionaire

A pedestrian walks past an advertisement for online shopping site in Shanghai on June 8, 2013

Photograph by Imaginechina via AP Photo

A pedestrian walks past an advertisement for online shopping site in Shanghai on June 8, 2013

(Updates in the first paragraph stock performance and Liu's net worth. Corrects's advantages in its Tencent tie-up in the sixth paragraph.)

China has a new Internet billionaire. Richard Qingdong Liu is the 41-year-old founder and chief executive of (JD), a Beijing-based online retailer that is the closest thing to a Chinese version of (AMZN). Nasdaq trading of the company’s shares started on Thursday, and by the end of the day’s stock price had jumped 10 percent. With the IPO, Liu’s net worth is more than $6 billion.

That should make it easier for Liu to sit down with his fellow billionaire, Tencent Chairman Ma Huateng, aka Pony Ma. Tencent (0700:HK) is China’s largest Internet company by market value; Ma’s net worth is $14.2 billion. Liu has joined forces with Ma in an expensive fight for dominance among China’s leading Internet companies, Alibaba, Baidu (BIDU), and Tencent, that has extended beyond the Big Three to their many partners.

Alibaba, Baidu, and Tencent have all been making deals that position them for the next big growth spurt in the world’s largest Internet market. Thanks to Ma’s confidence in Liu, Team Tencent is about to enjoy a big win. It owns a 15 percent stake in, which it bought in March for about $215 million. Yesterday, in the biggest IPO ever for a Chinese company, priced its shares at $19 apiece, giving the online retailer a market valuation of $26 billion. will raise $1.78 billion from selling shares to the public and $1.3 billion from an additional investment by Tencent. That capital will help the company as it tries to close the gap with Alibaba, which has long dominated Chinese e-commerce. Alibaba is on track to have a much larger IPO of its own in the U.S.; indeed, the buzz surrounding Alibaba probably fueled investor interest in “This was clearly driven by demand for Chinese names,” James Gellert, CEO of New York’s Rapid Ratings International, told Bloomberg News. isn’t an Alibaba clone, though. It sells products itself and operates its own logistics network, making the company more like Amazon than Alibaba’s Taobao and Tmall, which are marketplaces for others to buy and sell goods. And as a member of Tencent’s network, should benefit from the immense popularity of WeChat, Tencent’s WhatsApp-like mobile app. China is the world’s largest smartphone market, and mobile shopping penetration in China is expected to increase from 9.2 percent last year to more than 20 percent by 2016, according to iResearch.

With Tencent and working together, WeChat can provide many Chinese consumers with an easy way to find items to purchase on That’s something that Alibaba, which has struggled to persuade people to use its mobile app, has yet to match.

Einhorn is Asia regional editor in Bloomberg Businessweek’s Hong Kong bureau. Follow him on Twitter @BruceEinhorn.

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