Fresh off of a $3.7 billion Hong Kong IPO, China mall developer Dalian Wanda is attempting to put some of its new cash to work in the world of ecommerce.
The owner of China’s biggest chain of malls – with 108 shopping centres nationwide at last count – announced on Friday that it had bought a controlling stake in 99Bill, China’s fourth-largest online payment platform.
By scooping up the PayPal look-alike, Wanda is hoping to turn the transformational force of online shopping into a complement to its array of offline shopping centres, rather than a potentially destructive force.
Wang Jianlin Ready to Spend on Ecommerce
Now that his company is cashed-up following its IPO last week, Dalian Wanda chairman Wang Jianlin appears to be placing ecommerce near the top of his to-do list.
While the cost of the acquisition of 99Bill (which is know in Chinese as Kuaiqian) has not yet been announced, an account in Reuters estimated the deal at RMB 2 billion ($322.55 million).
At a news conference, Wanda’s CEO, Ding Benxi said, “Wanda Group hopes that 99Bill will soon provide online payment solutions for all Wanda’s businesses, and quickly become a leading payment and financial service provider in China,” according to Reuters.
More Jousting with Jack Ma
By acquiring 99Bill, Wang appears to be setting up a showdown with rival Jack Ma. The Alibaba chieftain displaced Wang as China’s wealthiest man on the Forbes China Rich List for 2014, and already owns China’s biggest online payment service Alipay.
Alipay dominates the online payment market in China with an estimated 74.3 percent of the market (according to iResearch) and processed more than $150 billion in payments during 2014.
While Wang’s recent Hong Kong IPO of his commercial properties, and expected IPO of his mainland movie theatres may have helped him win back ground on the China Rich List, the purchase of 99Bill shows Wang’s determination to take on Ma’s Alibaba on its home turf.
Unfortunately, 99Bill currently is said by iResearch to have only 6.9 percent market share, and Wanda has no previous experience with ecommerce. The deal is also surprising considering that Wanda inked a deal in August this year to cooperate with Tencent’s Tenpay online payment platform, which is currently China’s third-largest, and has been growing rapidly.
Moving Wanda Online
Despite the challenges, Wang seems determined to move Wanda online.
The companies joint venture with Tencent also includes search giant Baidu and is aimed at enabling online deals for shoppers at Wanda’s 108 malls, 72 luxury hotels, and 150 movie theatres across China.
Wanda has said that it will invest RMB 5 billion in the ecommerce project, and it holds a 70 percent share in the business. In addition to its property business, Wanda is expanding its entertainment ventures to include a chain of theme parks in China, as well as producing its own film studios.