Tencent’s shedding of its stake in JD effectively closes a chapter in which the social-media giant built up a stake in the rival of

Alibaba

Group Holding Ltd. to challenge it in China’s huge e-commerce market. It still retains significant stakes in other major e-commerce players such as food-delivery company

Meituan

and shopping giant

Pinduoduo Inc.

As part of the new arrangement, Tencent said its president,

Martin Lau,

resigned from the board of JD.com. Tencent said both companies would continue to maintain a business relationship despite the disposal of its stake.

Shares of JD.com fell 7.6% in morning trading in Hong Kong following the announcement of the distribution. Shares of Tencent rose 4.5%.

Tencent, best known for its ubiquitous social-media app WeChat and for its dominant presence in China’s online gaming market, has invested widely in tech companies domestically and overseas, becoming a significant backer of up-and-coming firms in social media, entertainment and electric vehicles.

Many of those bets have paid off handsomely amid China’s long-running boom in tech-company shares. In November, Tencent disclosed an investment portfolio worth the equivalent of $138 billion as of the end of September 2020, nearly 10 times the figure it reported four years earlier.

More recently, Tencent has been in the crosshairs of China’s regulatory crackdown on internet and other big tech companies, helping to send shares down about 20% this year.

In a research note, Thomas Chong, an analyst at investment bank Jefferies, said JD.com has seen healthy growth in its financials, including margins, revenue, profitability and cash flows. “JD has demonstrated solid execution over the past few years with continued improvement in fundamentals since 2014,” he said.

JD.com reported a 29% increase in revenue last year, with net income more than quadrupling to 49.4 billion yuan, or about $7.6 billion.

Write to Dan Strumpf at daniel.strumpf@wsj.com