China’s largest social media and gaming platform operator Tencent Holdings is entering into a joint venture with Wanda Group’s real estate arm, the South China Morning Post reports, as it hopes to compete with market rivals as a “smart” retailer.
Tencent has said it plans to take a 42.5% stake in the new venture, with 51% going to Wanda Commercial and the remaining 6.5% held by electronic invoice provider Gaopeng.
Wanda’s commercial real estate holdings may offer Tencent a means to catch up with rival tech giant Alibaba which has recently launched a string of marketing and investment projects under the banner of “new retail”. Alibaba, which owns online shopping website Taobao, has used traditional brick-and-mortar as supplementary distribution channels.
“For Wanda Plazas, the cooperation will bring in enormous online traffic through WeChat and other platforms, enabling them to undergo smart upgrades, build a robust membership system, and increase the company’s overall value,” said Wanda in a company statement. It went on to say that Wanda’s offline traffic will help direct Tencent’s online consumer base into its offline resources.