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Wanda eyes e-commerce

2014-08-28 11:07 Global Times Web Editor: Qin Dexing

Property group reportedly forms joint venture with Internet giants

Commercial property developer Dalian Wanda Group is set to enter China's booming e-commerce arena with the launch of an e-commerce joint venture with domestic Internet powerhouses Tencent Holdings and Baidu Inc, media reports said Wednesday.

The 5 billion yuan ($811.07 million) joint venture will be 70 percent held by Wanda, with the remaining stakes shared equally by Tencent and Baidu, Reuters reported Wednesday, citing sources familiar with the matter.

An announcement of the new joint venture is expected on Friday at an event in Shenzhen, South China's Guangdong Province where Tencent is headquartered, said a report on stcn.com, the website of the Securities Times newspaper, on Wednesday.

Wanda will be leading the venture while its two partners will bring their respective strength to the business, in an expected integration of Baidu's group-buying and mapping services, and Tencent's social networking and payment capabilities, the report cited an unidentified source as saying.

A Wanda spokesman did not immediately respond to a request for comment, while spokeswomen for Tencent and Baidu declined to comment when contacted by the Global Timers on Wednesday.

The new venture, if finalized, would be an indication of how avid Wanda has been in exploring approaches to pry open the nation's vast e-commerce market that is yet to become a bankable field for the commercial real estate, film and luxury hotel conglomerate.

In mid-July, Wang Jianlin, chairman of Wanda and China's richest man with an estimated wealth of $15.9 billion according to Forbes, put a foray into e-commerce on the agenda by announcing that the company will seek 5 billion yuan to launch a new e-commerce business.

The largest domestic e-commerce operators would be invited to join the new business as investors, Wang had said at that time, without giving the names of the potential partners.

Industry analysts remain cautious in forecasting a bright outlook for Wanda's tie-up with Tencent and Baidu, a union of three giant companies.

With the new venture, Wanda could achieve an online extension of its huge off-line capabilities, while Tencent and Baidu could gain a conduit to market their offerings of various Internet services, Lu Zhenwang, chief executive of Shanghai Wanqing Commerce Consulting, told the Global Times on Wednesday.

But whether the partnership can ultimately succeed depends on the integration of the two Internet behemoths' existing strengths into the new company to be led by Wanda, Lu noted.

What might particularly tone down the optimism about the seemingly powerful union is the selection of Tencent as a partner, according to Feng Lin, a senior analyst at China E-Commerce Research Center.

Tencent, which already has a 15 percent stake in online retailer JD.com Inc, is likely to be embroiled in an awkward position with its investment in the new venture, Feng told the Global Times on Wednesday.

Currently, Alibaba Group, which is heading for a record-setting US IPO, and JD.com, which floated its shares on the NASDAQ in May, are two top e-commerce companies in China where online shopping is booming with the growing popularity of smartphones and the Internet.

In a new study by global information and measurement company Nielsen based on an online poll of more than 30,000 respondents in 60 countries and regions, China had the highest percentage of respondents ready to shop online in 18 out of the 22 product categories tracked, Nielsen said in a survey release sent to the Global Times on Wednesday.

In a suggestion of Chinese consumers' willingness to shop online, the study found that "unlike many countries [and regions], especially that in Latin America where consumers prefer to browse online but shop offline, China is seeing a reverse trend."

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