Chinese Internet giant Tencent has signed a contract with South Korea’s biggest property insurer, Samsung Fire & Marine Insurance, to partner the latter in a joint venture in China.
Under the partnership deal, Samsung Fire’s Chinese branch will be converted into a joint venture.
Samsung will own a 37% stake in the venture with Tencent becoming the second largest shareholder with a 32% stake. Other Chinese tech and financial firms will also invest in the joint venture and their combined stake will reach 31%.
The strategy of signing a partnership with local players is generally deemed more stable than other expansion tactics in terms of potential legal risks, particularly when the other country is China, reported The Korea Times.Samsung Fire plans to take advantage of Tencent’s online platforms as sales channels. Tencent operates China’s top mobile messenger app WeChat, which has over 1.1bn monthly users.
The joint venture is expected to focus on launching a series of online insurance products.