Three Chinese billionaires joined forces to establish the largest e-commerce company to challenge the dominance of Alibaba Group Holding Limited, which is close to launching its initial public offering (IPO) in the United States.
Details of Wanda E-Commerce joint venture
Today, Robin Li, chairman and CEO of Baidu Inc (ADR) (NASDAQ:BIDU); Wang Jianlin, chairman of Wanda Group and Pony Ma, chairman and CEO of Tencent Holdings Ltd (HKG:0700) signed a joint venture to establish Wanda E-Commerce Company with an initial capital of $814 million.
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Wanda Group holds 70% equity while Baidu Inc. (ADR) (NASDAQ:BIDU) and Tencent Holdings Ltd (HKG:0700) each own 15% stake in the joint venture.
Wanda Group is the biggest commercial land developer and cinema operator in China. Baidu Inc (ADR) (NYSE:BAIDU) is the largest search engine provider while Tencent Holdings Ltd (HKG:0700) is an investment holding company and offers different online products and services with a huge user base in the country.
The three companies will combine their respective strengths by integrating their products to create the leading O2O e-commerce business model worldwide.
Baidu Inc (ADR) (NASDAQ:BIDU) Wanda Group, and Tencent Holdings Ltd (HKG:0700) will work closely in developing payment and e-commerce financial products, universal customer loyalty program, big data integration, Wi-Fi sharing and product integration.
“Online-to-offline is the biggest cake in e-commerce. There’s no true online-to-offline platform in China and, in this situation, everyone’s chances are equal,” said Wanda Group Chairman Wang.
On the other hand, Dong Ce, the CEO of Wanda E-commerce Company emphasized, “The integration of online and offline business is an inevitable trend in the development of the e-commerce industry. According to him, the partnership of with the two IT giants in the country will boost Wanda Group to become the largest O2O platform.
Dong said Wanda E-Commerce Company plans to launch its service in all existing 107 Wanda Plazas by the end of this year. Its service will be available in all of the plazas, hotels and resorts of Wanda Group by 2015. He estimated that the membership of Wanda E-Commerce will exceed 40 million this year and will add more than 100 million members by next year.
Dong added that the company registered a “cool” name for the joint venture, which will be announced during its official launching.