Tencent invests in Wanda Commercial as it pushes into online to offline retail sector
Tencent has teamed with ecommerce giant JD.com, electronics retailer Suning and real estate developer Sunac to acquire a 14% stake in Wanda Commercial Properties, China’s largest commercial property developer.
Tencent teams with JD.com, Suning and Sunac to take on Alibaba in retail
The RMB 34 billion ($5.4bn) deal represents “one of the world’s largest single strategic investments between Internet companies and brick-and-mortar commercial giants”, according to Tencent.
The deal marks the latest move into the retail sector by Tencent, which is looking to take on rival internet giant Alibaba and grow its mobile payments service through O2O (online to offline) retail opportunities, which Tencent is calling “new consumption”.
“New consumption”, much like Alibaba’s “new retail”, aims to integrate online and offline services to provide Chinese consumers with intelligent and convenient shopping experiences.
The deal will see Wanda Commercial repositioned as Wanda Commercial Management Group moving away from property development into commercial management.
Wanda Commercial Management Group will collaborate with Tencent, JD.com and Suning to use the companies online resources and its own commercial assets to create a “win-win situation” for both brick-and-mortar businesses and Internet companies. The companies aim to create 1,000 Wanda Plazas in China “as early as possible”.
Tencent will also sign a strategic deal with Wanda Group’s Internet Technology Group.
The move sees Tencent directly take on Alibaba, which has been moving heavily into bricks-and-mortar retail through its own deals with supermarket giant Bailian Group and mall operator Intime Retail, as well as rolling out its Hema supermarkets across China.
It's the latest investment deal by Tencent, which is one of the world's most valuable companies. Last month, the internet and gaming giant took a minority investment in Hollywood studio Skydance Media, while in December it invested in online retailer Vipshop.