Alibaba Group Holdings Ltd. and Ant Financial Services Group on Tuesday announced a 6 billion yuan ($967 million) joint venture to tap the fast-growing services market.

Each company will hold a 50 percent stake in the new entity, which is called Koubei.

Ant Financial, which was once a subsidiary of Alibaba, operates Alipay, China's Paypal-like third-party payment platform used by over 300 million people.

Mobile payment, consumer credit and small and micro loans and other financial services for Koubei will be provided by Ant Financial.

Taodiandian, Alibaba's food delivery business will also be merged into the new company.

The announcement of this joint venture follows Tencent, Alibaba's major rival, buying a 20-percent stake in restaurant ratings and group buying website Dianping.

China's online-to-offline (O2O) local services market reaped 235 billion yuan ($36.87 billion) last year, according to Internet industry research agency iResearch.

(Xinhua News Agency June 23, 2015)