Baidu and Tencent’s ecommerce joint venture with Wanda nabs $161M funding

Today Wanda Group, the Chinese commercial real estate firm best known for its movie theater chains, announced that its joint ecommerce venture with Tencent and Baidu closed a RMB 1 billion (US$161 million) funding round. The two investment funds, Hong Kong Xu De Ren Dao E-commerce Investment and Shengke Limited, will take 2 percent and 3 percent equity in the company, respectively. Wanda Group states that Tencent and Baidu now each hold a 15 percent stake in the venture, which is now valued at RMB 20 billion (about US$3.2 billion).

The Wanda-Tencent-Baidu ecommerce venture (which Wanda refers to as Wand E-commerce in its release) was publicly announced back in August. Wanda maintained a 70 percent stake in the US$814 million venture, with Tencent and Baidu splitting the remainder evenly. While the companies gave few specific details regarding the venture’s execution, their public statements repeatedly mentioned the importance of online-to-offline commerce. When one factor’s in Baidus commitment to maps and beacon technology, WeChat’s commitment to payments and social, and Wanda’s entertainment properties, it’s easy to speculate – but hard to know specifically – how the venture might play out.

Following the news of the venture’s formation, Wanda has kept quiet regarding its development. But in December it purchased a stake in 99Bill, an Alipay competitor. That would appear to confirm Wanda’s interest in integrating online payments into its offline services, and challenge previous assumptions that Wanda would be hopping aboard the WeChat Payments train.

Despite how little is known about the joint venture, Wanda looks set to own a bevy of virtual real estate in addition to its physical real estate. “O2O places a greater importance on the link between people and services than traditional commercial methods, with the size of the market considerably greater than just physical transactions,” its statement reads. “Wanda possesses the world’s largest offline consumer network, with 1.5 million customers in 2014 and an estimated 6 billion customers by 2020. If Wanda E-commerce can combine its offline and online resources effectively, it has the potential to become a new Internet giant with incredible potential.” In other words, Wanda is thinking big.

Wanda adds that it will announce an additional funding round in late 2015.

See: Wanda buys stake in Alipay competitor

Editing by Steven Millward, top image from jessflickr