Wanda Group, a Chinese real estate firm, will form a joint venture with Tencent and group-buying web site Gaopeng to integrate online and offline businesses, according to Reuters. The new company will consist of Wanda’s Internet business and Gaopeng’s electronics invoicing business and will draw online traffic from Tencent.
One of the partnership’s goals is to grow Wanda’s offline presence in smart shopping malls, using platforms such as Tencent’s WeChat to drive online traffic. Wanda Group will take a 51% stake in the joint venture, while Tencent will control 42.48% and Gaopeng will hold the remaining share.
The deal also will accelerate the implementation of Tencent’s “smart retail” strategy, which focuses on providing technological tools to boost the performance of physical retailers.
“We wish to seize the opportunities presented by using digital technologies and digitalization to boost offline retail and connect people, goods and places together,” said Pony Ma, CEO of Tencent in an interview with China Channel. “If retailers don’t do this, they may lose competitiveness.”
In March 2018, Tencent partnered with solution provider Star Plus to launch standardized services for areas including e-Commerce services, supermarket services, department store smart shopping, warehousing and logistics and retail payments.
Wanda and Tencent have spent more than $10 billion on retail-focused deals since the start of 2017. Tencent has focused on the physical channel, taking stakes in Better Life in February 2018 and Carrefour China in January 2018.