Tencent Strikes New Retail Deal to Keep Step With Alibaba
Tang Shihua
DATE:  May 31 2018
/ SOURCE:  Yicai
Tencent Strikes New Retail Deal to Keep Step With Alibaba Tencent Strikes New Retail Deal to Keep Step With Alibaba

(Yicai Global) May 31 -- Tencent Holdings, China's biggest tech firm by market cap, will team up with the world's largest private property developer Dalian Wanda Group and group-buying platform Gaopeng as it looks to quicken its step in the New Retail sector.

Wanda Commercial Management Group will hold a 51-percent stake in the new unit while Tencent will take an almost 42.5-percent share, the three companies said yesterday without disclosing cash amounts. Tencent-backed Gaopeng's Chief Executive Gao Xia will fulfill the same role at the joint venture.

Wanda will merge its own online business into the new firm, aiming to use smart technology at Wanda shopping malls, which attracted more than three billion shoppers last year. Tencent will drive online traffic while Beijing-based Gaopeng will provide digital invoicing.

"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," South China Morning Post cited Wanda as saying. "The cooperation will offer Tencent access to huge volumes of offline traffic and varied consumption scenarios, directing its online traffic and technology into its offline resources and accelerating the implementation of Tencent's smart retail strategy."

Shenzhen-based Tencent has been making steps into the retail sector as it looks to catch up with tech rival and New Retail trailblazer Alibaba. The latter has been championing the strategy, which Executive Chairman Jack Ma described as "the integration of online, offline, logistics and data across a single value chain," and many of the country's biggest firms are looking to take a slice of the pie.

Tencent and French supermarket Carrefour opened their first smart store in China this month, and the firm has also invested in Yonghui Superstores, one of China's biggest superstore brands. Last month, it partnered China Resources Holding, which runs 11 companies listed in the Chinese mainland and Hong Kong, to digitize China's biggest retail supermarket chain CR Vanguard.

Alibaba, the world's biggest retailer, already has a tight grip on New Retail and holds stakes in Sun Art Retail Group and Auchan Retail. The Hangzhou-based firm began life as 'China's eBay,' but is now one of the globe's biggest tech firms, providing meal delivery services, mobile payments and other platforms closely linked to China's changing retail environment.

Editor: James Boynton

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Keywords:   TENCENT,Wanda,Gao Peng,Internet Technology,New Retailer