Robin Li, founder and chief executive officer of the search engine company Baidu Inc and the richest man on the Chinese mainland, has invested in 360buy.com, a company that started by mainly selling computers, communication and electronics over the Internet.
When measured by its market share, 360buy.com is the biggest website selling directly to consumers in China.
Li is the latest in a series of famous investors who have wanted to own part of 360buy.com, a company valued at about $10 billion at the end of last month.
Among the others are the Walton family, which controls Wal-Mart Stores Inc, and Digital Sky Technologies, the Russia-based Internet investment group that owns stakes in Facebook Inc and Groupon Inc. Both took part in 360buy.com's third round of financing, in which it raised $1.5 billion.
"Robin Li invested in us last year, taking a stake of less than 1 percent," Richard Liu, chairman and chief executive officer of 360buy.com said at a news briefing in Beijing on Tuesday. The announcement surprised many, especially since Liu has complained about Baidu Inc's decision to sell to competitors the brand name "Jingdong", the Chinese name for 360buy.com.
Liu even hinted in his micro blog in April that 360buy.com might cease advertising on Baidu because of what he deemed to be the company's unethical behavior.
"We have worked with Baidu for years and hoped the search engine giant would bring traffic to 360buy.com," Liu said. He said Robin Li called him in protest. "Although Robin is my investor, I will still criticize wrong practices," Liu laughed.
Founded in 1998, 360buy.com has seen its annual revenue increase by more than 200 percent in the past six years. It brought in annual revenue of 10.2 billion yuan ($1.6 billion) in 2010 and that figure is expected to climb to between 24 billion and 26 billion yuan this year.
In 2010, the company grabbed 32.5 percent of the Chinese market for goods sold directly to customers over the Internet.
It's followed by Joyo.com and the New York Stock Exchange-listed Dangdang.com, similar websites that each have 9.2 percent of that market, according to the consulting firm iResearch.
The listing excluded Taobao.com, the largest online retail site in China measured by sales, which runs a website that sells directly to consumers and also allows consumers to sell to one another.
Taobao.com's direct sales to consumers have about three times the value of those made through 360buy.com to consumers, said Chen Shousong, an analyst with Analysys International.
"The competition between Taobao.com and 360buy.com is becoming increasingly intense," he said.
On Tuesday, 360buy.com announced it will cease cooperating with Alipay.com within a week. Analysts said 360buy.com might no longer want to work with a company associated with Taobao.com, which, along with Alipay.com, is owned by Jack Ma, the founder and CEO of Alibaba Group Holding Ltd.
"Richard Liu said Alipay charges high transaction fees, but I don't think that is the deep-rooted reason," said Zhang Meng, an analyst with Analysys International.
360buy.com plans to list in the United States no later than 2012, and hopes to raise $2 billion from the capital markets, according to Liu.