E-House (NYSE: EJ), a leading real estate services company in China, today announced that its wholly-owned subsidiary Leju, former real estate channel of Sina, has submitted a draft registration statement for a proposed IPO on US market. Moreover, the subsidiary also entered into a strategic cooperation agreement with Tencent (HKG: 0700). [Update] Tencent announced March 21 that it will acquire 15% of the fully diluted shares in Leju with $180 million and the transactions is expected to be finalized by the end of this month.

Leju is a leading provider of real estate online services including advertising, listings and product launch information (Real Estate Online Information), and online-to-offline e-commerce services that facilitate real estate transactions in China.

E-House may sell part of Leju’s shares, but it will still be the largest shareholder of the latter after the proposed IPO. The number of American depository shares to be issued by Leju in the IPO has yet to be determined, the parent company added.

Under the strategic cooperation agreement between Leju and Tencent, the two companies have agreed to jointly develop software and tools for use on WeChat to facilitate Leju in opening batches of WeChat public accounts associated with real estate projects. Leju has agreed to adopt WeChat payment solutions as the payment method for real estate e-commerce transactions conducted by Leju users on WeChat.

Leju and Tencent will also explore and pursue additional opportunities for potential cooperation, including but not limited to cooperation involving Tencent’s social communications platform such as WeChat, QQ and mobile QQ, the social media service Tencent Microblog, the social networking service Qzone, and/or other Tencent internet properties.

Real estate e-commerce sector has seen rapid growth in recent years. The Chinese market size of this sector reached 9.99 billion yuan (around $1.62 billion) in 2013, of which Leju account for 28.7% of the market share and SouFun account 27.1%, according to data from iResearch. The research institute thinks that cross-boundary cooperation between e-commerce realtors and other industry will facilitate the upgrading of platforms and the innovation of marketing models.

The share price E-House surged more than 200% in the past one-year period, while that for SouFun (NYSE:SFUN), another US-listed Chinese e-commerce realtor, also soared more than 200% from $26 per share a year earlier to $92 apiece at present.

E-House (China) Holdings Limited offers a wide range of services to the real estate industry, including online advertising and e-commerce, primary sales agency, secondary brokerage, information and consulting, offline advertising and promotion and real estate investment management services. It now claimed a nationwide network covering approximately 255 cities.

image credit: Leju

Emma Lee (Li Xin) was TechNode's e-commerce and new retail reporter until June 2022, when she moved to Sixth Tone to cover technology and consumption. Get in touch with her via lixin@sixthtone.com or Twitter.

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