ByteDance’s Douyin, the Chinese counterpart of TikTok, is looking to acquire a financial technology subsidiary of China’s HyUnion Holding to enhance the transaction experience of its local life service business.
Douyin signed an agreement with Shenzhen-listed HyUnion Holding to purchase 100% shares of the firm’s indirect wholly-owned payment service, Union Mobile Pay E-Commerce, for a consideration of at least 750 million yuan ($103.7 million) plus the unit’s net asset value at the time of the equity transaction, HyUnion disclosed in an exchange filing on Thursday.
As of December 31, 2023, the net asset value of Union Mobile Pay E-Commerce was estimated at more than 648.5 million yuan ($89.6 million). Its entire equity valuation stood at 1.382 billion yuan ($191 million), according to the filing.
Subject to regulatory approval, the acquisition will see Union Mobile Pay E-Commerce merge with Douyin Pay, a payment option that Douyin launched in early 2021 to compete with the existing Ant Group’s Alipay and Tencent Holdings’ WeChat Pay for in-app purchases.
The deal comes as Douyin, which has over 300 million, largely ‘Gen Z’. monthly active users (MAUs), is looking to grow into a super app integrating short video sharing with live streaming e-commerce and local life services. This ambition puts it in direct competition with the country’s tech giants like food delivery firm Meituan and Alibaba Group, which owns the online shopping empire Taobao.
The proposed merger of Union Mobile Pay E-Commerce with Douyin Pay targets to strengthen Douyin’s local life offerings, which allow users to purchase food and daily necessities, as well as to book hotels, sightseeing tickets, and other leisure activities from local merchants.
Building on its strong user foundation, Douyin has made advances in the local life business with a network of over 4.5 million offline merchants including restaurants and lifestyle activity providers across over 370 Chinese cities by the end of 2023. The business posted a 256% increase in gross merchandise volume (GMV) last year.
Its parent ByteDance is ranked by the Hurun Research Institute as the world’s biggest unicorn with a valuation of $200 billion.
