Wanda Commercial Property Deal Lets JD and Tencent Leverage O2O

30/01/2018

In a significant deal to upgrade its investments, Wanda Commercial Properties Co. has signed an agreement with China internet giants JD.com and Tencent, property developer Sunac, and retail company Suning. With Tencent leading the acquisition, the four companies collectively bought a 14% equity stake for RMB 34bn ($5.37bn) in Dalian Wanda’s main subsidiary.

Announced Monday, the deal is one of the largest strategic investments between internet companies and brick-and-mortar commerce, which was needed to ease Wanda Commercial Property’s financial woes. “Starting today, DWCP will no longer be a property developer, but rather will become a pure commercial management company and will push to list as soon as possible,” said Wanda in a statement late Monday. Relevant parties will strive to take the company public as soon as possible.

Wanda Commercial Properties Co. is the flagship company of Dalian Wanda Group and is the world’s biggest commercial property firm. As of the end of 2017, the company held 31.51 million square meters of operating commercial property spaces with 235 Wanda Plazas operating in China. According to its statement, it hopes to achieve 1,000 Wanda plazas in China by using its new infusion of cash.

Leveraging this synthesis of commercial space and online resources, Wanda Commercial Properties management will carry out various collaborations to nurture a “new consumption” model in China. Reflective of the growing trend to blend offline and online retail, Wanda’s new model will engage O2O to offer Chinese consumers a frictionless shopping experience.

The deal was lucrative for Tencent, which is seeking additional avenues for its 980 million WeChat users to shop and spend. Tencent also signed a deal to invest in French hypermart operator Carrefour’s China operations and opened an unmanned grab-and-go store in Shanghai, extending a bet that O2O will boost mobile payments.

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