Beijing - China's Dalian Wanda group said on Friday it would set up a 5 billion yuan ($814 million) e-commerce joint venture with Tencent Holdings and Baidu, as the firms push into the high-growth e-commerce sector.
The joint venture, to be registered in Hong Kong, will be 70 percent owned by privately-held Wanda, while Chinese internet giants Tencent and Baidu will hold 15 percent respectively, Wanda said in a press release.
China is the biggest e-commerce market in the world, with its No. 1 player, Alibaba Group Holding Ltd transacting more goods than Amazon.com Inc and eBay combined.
The deal is structured over three years, two people familiar with the deal said. The initial investment by the three firms will amount to 1 billion yuan, they said.
By teaming up with Tencent and Baidu, Wanda will to become the biggest online-to-offline e-commerce platform in the world, said Dong Ce, the chief executive of the new venture. Online-to-offline, or O2O, involves people using their smartphones to find and purchase goods and services, often physically close to them.
Wanda, which bought US cinema operator AMC Entertainment Holdings in 2012, is a commercial property, luxury hotel and film conglomerate controlled by Wang Jianlin. Wang is China's wealthiest billionaire with a net worth of $16 billion, according to Forbes.
Wanda said the joint venture, which Wanda has not yet named but was referred to as Wanda e-commerce, will set up e-commerce services in its 107 commercial real estate properties throughout China this year.
By 2015, the conglomerate will have established these services in all of its shopping malls, hotels and holiday resorts, Wanda said.
Social media and video games giant Tencent and Baidu, China's dominant search engine, will help the tie-up build internet finance and payment products, big data services and customer account and membership systems. - Reuters