JD.com and Baidu have jointly invested $400 million in elevator advertising firm Xinchao Media Group.

Why it matters: The two Chinese tech giants are returning investors in the Chengdu-based media company. The deal is a major external investment for JD following a management reshuffle. In May, Hu Zhengwei, the former executive board of investment firm Warburg Pincus, became JD’s investment unit head, replacing JD’s vice president Hu Ningfeng. 

Details: The deal makes JD the largest shareholder of Xinchao, according to a report by China STAR Market. Xu Lei, president of JD, is now a board member of Xinchao.

  • JD confirmed the investment with TechNode but declined to disclose the specific amount it invested.
  • Xinchao’s corporate website says the company is valued at more than $2 billion. 

Context: Xinchao operates more than 650,000 digital advertising panels in elevators across 105 Chinese cities, reaching 200 million middle-class consumers and serving more than 23,000 clients, according to the company website.

  • JD led a RMB 1 billion investment in Xinchao in 2019, while Baidu led a RMB 2.1 billion fund in the elevator-ad company in November 2018. Other investors include home furnishing chain store Red Star Macalline, classified ad site 58.com, and edtech platform TAL Education.
  • The company plans to invest RMB 10 billion in the next five years, aiming to operate 2 million digital ad panels and reach 300 million to 500 million middle-class Chinese residents.
  • JD.com’s e-commerce rival Alibaba has made similar investment moves, holding a 6.6% stake in Focus Media, another elevator ad company, after investing $15 billion in July 2018.

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.