Big money is on the move in China: two of its biggest internet firms are joining forces with real estate conglomerate Delian Wanda to launch an ecommerce venture aimed at dethroning Alibaba from its current reign as king of the country’s burgeoning ecommerce market.
The country’s unrivalled search colossus, Baidu, and Asian technology leviathan, Tencent, will between them hold 30 per cent (split evenly) of the $814m invested in Wanda Ecommerce, a new Hong Kong-registered firm. Wanda will own the remaining 70 per cent.
The venture is undoubtedly a sign of the increasingly ferocious competition in the Chinese internet industry, with Tencent and Baidu now adding ecommerce market penetration to their digital content dissemination. In China, Alibaba is one of a trio of conglomerates (known collectively as BAT) that has exerted a stranglehold over the country’s ecommerce market. But maybe this is an empire that’s about to fall, or at least to wobble.
You wouldn’t think it from the headlines, though: Alibaba has announced that it’s about to list in the U.S. in what’s rumoured to be the biggest-ever IPO, and its revenues have soared by 46 per cent on last year, thanks in no small measure to a major hike in mobile-generated sales.
But Dong Ce, CEO of the new joint venture, says that it’s set to become “the world’s largest O2O [online to offline] ecommerce platform.”
That’s quite a claim, but it’s not without justification. Wanda has 107 commercial real estate properties (including huge shopping malls and resorts) which between them attract 1.5 billion visitors a year. They’ll all have ecommerce services now.
That’s pretty big, in the scheme of things.