Wanda broadens horizon to e-commerce

A mobile app poster for Wanhui, a website operated by Dalian Wanda Group Co Ltd, at a shopping plaza in Zhengzhou, Henan province. Wanda has ambitions to build an online-to-offline business empire in China. Provided to China Daily

Conglomerate eyeing tie-ups with others firms to tap potential in the industry

After entrenching its position in shopping plazas, movie-theater chains, five-star hotels and resorts, Chinese conglomerate Dalian Wanda Group Co Ltd has now set its eyes on e-commerce with an ambitious plan to use its offline dominance in online business.

Wang Jianlin, founder and chairman of Wanda Group, said in a company meeting that his company will team up with several leading e-commerce players in China to set up an e-commerce company with an initial investment of 5 billion yuan ($806 million).

Wang, the richest man on the Chinese mainland, said that Wanda will spare no effort to develop e-commerce as its fifth "pillar industry" by 2020 after real estate, cultural tourism, finance and retail.

"In a couple of years, Wanda is expected to have nearly 200 shopping plazas, more than 100 hotels and eight to 10 resorts. Billions of visits are expected to be made to these places by consumers every year," said the 59-year-old with an estimated net wealth of $14.7 billion, according to Forbes magazine.

According to Wang's speech, which was made public by Wanda's official account on Sina Weibo - the Chinese version of Twitter - on Thursday, Wanda's e-commerce goal is to set up a business model that can make profits within three years. "Our goal is to make e-commerce a business that can bring in real money," he said.

He didn't specify how Wanda would develop its e-commerce business, but said that just like Tencent Holdings Ltd is known for WeChat, a popular instant messaging service and Baidu Inc is known for its search engine, consumers should immediately think of Wanda when it comes to online-to-offline business.

Facing the challenges brought by China's booming online shopping market, many brick-and-mortar store operators have made efforts to become Web-savvy. Suning Commerce Group Co Ltd, China's leading electrical appliances retailer with about 1,600 stores across the country, has launched its own online platform to ride the e-commerce wave.

Intime Retail (Group) Co Ltd, a Hong Kong-listed company that owns department stores and commercial real estate assets, teamed up with e-commerce conglomerate Alibaba Group Holding Ltd earlier this year to integrate e-commerce with brick-and-mortar businesses. A highlight was last year's Nov 11 shopping discount festival, when Alibaba allowed users of Tmall, a business-to-consumer platform, to place orders online while picking their orders up at Intime so that they did not have to wait for deliveries.

Wang Xiaoxing, an analyst with Beijing-based research firm Analysys International, said that it is likely that Wanda will integrate all of its offline resources, such as shopping malls, hotels and resorts, into one online platform. "For example, consumers can shop online to get discounts and other value-added services, and then watch a movie or dine at a restaurant in the nearby Wanda Plaza," said Wang.

Wang Xiaoxing said that Wanda's network of brick-and-mortar stores makes consumer visits its biggest asset to develop online-to-offline business. "However, as a traditional department store operator, Wanda needs talents to change its mindset in managing an e-commerce company," he said, adding that Wanda is likely to partner with group-buying sites or companies with strength in online payment.

Wanda made its first attempt in e-commerce by launching Wanhui, a website that offers various coupons that can be used in Wanda's shopping plazas, in December. But the newly founded company was soon in turmoil after most of its senior executives left for unknown reasons.

Lu Zhenwang, an independent Internet expert and the chief executive officer of the Shanghai-based Wanqing Consultancy, said the huge business portfolio of Wanda means it would be difficult to integrate all of the group's resources into one online platform.

Wang of Wanda also said the group will set up a finance company to oversee investment plans. He said Wanda will also look to list one or two companies in the second half of the year.