As it deals with mass store closings across China, Chinese shopping mall giant Dalian Wanda Group is hoping to find new life online as it prepares to square off against the country’s top e-commerce giants.
Earlier this month, the real estate developer that oversees a vast network of malls, hotels, department stores, theme parks, and movie theaters launched Ffan.com, an e-commerce site aimed at connecting users with local venues based on the city where they’re located. With tech heavyweights Tencent and Baidu serving as junior joint venture partners, the site has the potential to go head-to-head with Alibaba and JD.com, which currently dominate a gigantic portion of online sales in China. Like Alibaba’s Tmall and Taobao, the site allows third-party vendors to set up shop, and Wanda is predicting 100 million loyalty program members by the end of this year.
The young site’s current two sections—dining and film—reveal the company’s plans to use Ffan to boost its brick-and-mortar business that is currently under stress. The “film” section allows users to buy tickets to Wanda’s massive movie theater chain, while the site plans to add more sections in the future to direct users to purchase goods at the company’s department stores and malls. Many of the locations need a boost, as the company is currently in a “restructuring” process as it closes department stores that are losing money amidst the country’s ongoing economic slowdown and anti-corruption campaign—as well as competition from China’s booming e-commerce market and an oversupply of mall space.
Wanda has already announced plans to close 120 venues and is still considering more, while it has also decided to exit the once-lucrative karaoke business altogether. It plans for this process to allow it to cut down on its reliance on real estate with a goal of earning 65 percent of its profits from services by 2018.
The plan to start this e-commerce venture has been in the works for a year after Dalian Wanda, Baidu, and Tencent agreed to invest a total of $814 million and received $161 million in venture capital money. Dalian Wanda has also been working on competing with Alibaba for third-party payment platforms, buying a controlling stake last year in Alipay rival 99Bill.
Dalian Wanda has also been making significant investments in online travel booking as it works to develop hotels abroad aimed at cashing in on China’s growing number of both inbound and outbound tourists. In July, it invested $577 million in Chinese booking site Ly.com, which also received investment from Tencent. Like its e-commerce venture, the travel site will help create O2O synergy by driving tourists to Dalian Wanda’s hotels and tourism projects such as theme parks, water parks, and skiing areas.
For now, Wanda’s Ffan is sparse, and it remains to be seen whether the company that once thrived from offline shopping and entertainment can adapt to an increasingly digital marketplace, even with the help of some of China’s top tech companies.