Two of China’s largest internet companies, Baidu and Tencent, are joining with real estate conglomerate Dalian Wanda as Alibaba Group Holdings Ltd heads towards its initial offering in the US.
The $813 million deal will leave Dalian Wanda with a 70 percent stake in its ecommerce arm Wanda Ecommerce, and Baidu and Tencent will hold 15 percent each.
The partnership reflects the fierce competition in China’s internet industry as Baidu and Tencent try to penetrate the countries ecommerce and online payments markets, dominated by Alibaba.
The new group hopes to challenge Alibaba’s hold on these markets by focusing on online to offline shopping. The venture will set up ecommerce services in Wanda’s 107 commercial real estate properties, including Wanda Plaza shopping malls and resorts, allowing customers using smartphones to search the internet for goods available in Wanda stores.
With the alliance, Wanda “will become the world’s largest O2O [online to offline] ecommerce platform”, said Dong Ce, the chief executive officer of the joint venture.
The new venture will employ Baidu’s search capabilities and Tencent’s online payment channels Tenpay and Weixin payment, which will be the venture’s preferred payment channels.
“One day you are walking on a Wanda square and spot a girl with a nice dress, you just take a picture of her, and then you will know immediately which store in the Wanda plaza is selling the dress.” Baidu’s Robin Li said.
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