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#China s Invests $350 Million In Online Travel Company Tuniu

JD.com, China’s second largest e-commerce site, will invest $350 million in travel website Tuniu. the companies said on Friday.

Under the deal, JD.com will become Tuniu’s largest shareholder. It will own 27.5% of the online travel agency after purchasing shares at $5.33 each.

Tuniu will become the exclusive provider of travel products such as cruises and package tours on JD’s website and smartphone travel channels. The Nanjing-based company will operate those channels for five years without paying commission fees to JD.

The JD investment is part of a $500 million pledge by a group of investors including affiliates of Ctrip, DCM, Hony Capital and Temasek Holdings.

Donald Yu, Tuniu co-founder and chief executive, said he plans to use the proceeds to expand the company’s regional service centers and strengthen supply chains.

Last year, China’s online travel market grew 27% to 277.3 billion yuan. Ctrip is the biggest player in terms of revenue, according to consultancy iResearch.