Baidu and Tencent backed Wanda Group have bought stakes in 99Bill, an online payment company, according to a report from QQ Tech. Wanda Group is a business conglomerate that entered into an $814 million joint venture with Baidu and Tencent.
99Bill a big player in China
Though there was no official announcement about the terms of the deal, according to the report, the companies gave RMB 2 million ($322 million) to the Chinese company, although it is not known if it was given to acquire a minority or majority stake.
In China, 99Bill is the fourth-largest online payment gateway after Alipay, Tenpay and UnionPay, with 6.9% of the market, according to iResearch. In November Baidu was expected to acquire 99Bill for RMB 2 billion, but nothing certain came out. However, since Wanda is a Baidu-backed company, the latter will have a significant say in the next step the company takes. Baidu has always lagged behind Tencent and Alibaba in online finance, as its Wallet app had only a small market share.
99Bill, which functions are similar to Alipay, is also known as Kuaiqian and will continue to operate as an independent entity. The company is in the business of making several electronic payment-related products, such as a mobile wallet, a mobile point-of-sales device, microcredit loans, cloud-based business accounting software, and payment processing for cash, bank cards, recharge cards, PayPal among other such things. Businesses that are registered in China have access to 99Bill.
Baidu bids to supersede Alipay
Wanda Group has a slew of commercial properties such as hotels, movie theaters and malls across China. The company entered into a joint venture with Tencent and Baidu to cooperate on mobile payments on Wanda properties. The joint venture allows customers to use Tencent payment tools at over 100 locations. It is clear the number of locations will increase eventually and 99Bill will likely be added to the payment options. Baidu, Tencent, Wanda and 99Bill are coming together to supersede Alipay for e-payments at brick-and-mortar stores.
Alipay and Alipay Wallet are, however, significantly ahead of their competitors. According to iResearch, gross merchandise volume through the Wallet app totaled RMB 905.75 billion (about $147 billion) for the year 2013. Tencent’s WeChat payments and Tenpay posted just around RMB 50 billion. Alipay still holds almost half of all third-party online payments in China.