Since the traditional stores are considered as a way to attract new customers and a means to expand the mobile payment platforms, the two Internet giants of China, Tencent Holdings Ltd. and Alibaba Group Holding Ltd. (NYSE: BABA), are fighting against each other on gaining more partnerships with department-store and supermarket. Dalian Wanda Commercial Properties, China’s largest mall, is benefiting from this war.
An investor group that includes Tencent Holdings Ltd. and online retailer JD.com Inc. (NASDAQ: JD) is spending 34 billion yuan ($5.37 billion) for a 14% stake in Wanda. There is no doubt that this deal announced on Monday is going to provide both Tencent Holding Ltd. and its main business partner JD.com a great chance to blunt Alibaba’s move into traditional physical store, since Alibaba has established several partnerships with department-store and supermarket chains in China.
But Tencent also signed a partnership agreement with French retailer Carrefour S.A. earlier this month agreeing to take a stake in Carrefour’s Chinese entity.
Dalian Wanda Group has been under fire from Beijing since last year over its aggressive overseas expansion. Subsidiary Wanda Commercial has in turn found it impossible to raise dollar debt offshore, a key source of funding for Chinese property firms. With the backing of Tencent, Wanda Commercial should be able to ease any short-term liquidity concerns.