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 5 billion yuan ($814 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 disclosed that Wanda Group will hold 70% equity, while Baidu and Tencent each own a 15% 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.
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.