Tencent Invests in Wanda, Challenges Alibaba
Competition keeps growing on the e-payment market. Alibaba and Tencent have been undertaking considerable efforts to attract more mobile app users. And Tencent just invested in the field of commercial property through Wanda, by way of making room for WeChat Pay in the physical retail world.
The investment consortium initiated by Tencent, includes the e-commerce specialist JD.com, real estate promoter Sunac, and seller of electronic goods Suning. Their strategic investment agreement reached 4.3 billion euros (14% equity stake in the real estate company), which should help Wanda restore their financial situation (the group is heavily in debt).
Through this partnership, the Internet giant may expand their range of services, and boost the use of WeChat, as well as WeChat Pay in Wanda’s ecosystem. The point would be to implement WeChat Pay as an in-store payment option in retail locations operated by Wanda.
Leader in the field of commercial property in China, Wanda holds 31.5 million square metres of operating commercial property spaces. In 2017, these locations received roughly 3.2 billion visitors, and most of these people were WeChat users. A way for the Chinese giant to gain strength when facing Alibaba, whose payment solution started being implemented in-store months ago.
Comments – Tencent launches their offensive
Tencent increasingly relies on brick-and-mortar retail stores to win their battle against Alibaba, and help WeChat Pay gain momentum. This is not the first partnership announcement between Tencent and JD.com, as they are both trying to challenge Alibaba’s hegemony. They already invested in the Chinese destocking website Vipshop, as well as in the men's fashion specialist, Heilan.
Tencent also seeks to make room for their payment service in Europe and in the US. The official EU launch for WeChat Pay was announced in July; the group relied on BNP Paribas to rollout their solution in France with Galeries Lafayette. To address the US market, Tencent teamed up with a Silicon Valley start-up: Citcon. Yet, and just like Alibaba, they will have to face competition from Apple Pay.