China’s Wanda Group, Baidu and Tencent announced on Friday that they will establish the Wanda E-commerce Company, a Hong Kong registered joint venture with an initial capital of CNY5 billion (USD814 million).
The partnership expects to integrate their corresponding products and strengths to create an online-to-offline (O2O) e-commerce business model. Plans also include developing payment and e-commerce financial products, building a universal customer loyalty program, big data integration, Wi-Fi sharing, and product integration.
Wanda Group Chairman Wang Jianlin, Baidu, Inc. Chairman and Chief Executive Officer Robin Li and Tencent, Inc. Chairman of the board and Chief Executive Officer Pony Ma attended the signing ceremony held in Shenzhen. The partners disclose that Wanda Group will hold 70 percent equity, while Baidu and Tencent each own a 15 percent stake, respectively.
Wanda Group, a real estate leader and China’s largest cultural enterprise and the world’s largest cinema operator, expects to attract over 1.5 billion customers to its Wanda Plazas, hotels and resorts in 2014, solidifying its position as China’s largest offline commerce platform. Wanda conservatively estimates that its properties will draw in over five billion consumers annually by 2020, making it the world’s largest offline commerce platform.
As China’s largest search engine and Internet portal, Baidu has technical capabilities and big data resources, as well as a distribution platform for applications and services, with over 6 billion relevant search requests per day and over 10 billion monthly mean daily PVs for its location based services.
Tencent’s range of online products has the largest user base and highest activity in China. As of June 30, monthly active users on Tencent’s QQ instant messaging service reached 829 million, while its mobile social platform WeChat exceeded 438 million active users.
Wanda E-commerce Company CEO Dong Ce said the integration of online and offline business is an inevitable trend in the development of the e-commerce industry. The newly formed company will launch e-commerce services in all 107 Wanda Plazas, including those yet to open this year, by the end of this year. By 2015, all Wanda’s plazas, hotels and resorts will be equipped with e-commerce services. It expects membership to exceed 40 million this year and is expected to increase to over 100 million by next year.