Decoding Wanda e-commerce: Why didn’t it cooperate with Jack Ma?

It is worth mentioning that Wanda also had contact with Jack Ma when it was looking for an e-commerce partner . A former Wanda e-commerce executive said, "We communicated with many Internet companies at the time and also discussed with Alibaba, but ultimately failed to reach a cooperation agreement. Jack Ma himself has a close relationship with Intime director Shen Guojun, so they finally chose to cooperate with Intime."

"We live in a magical age." This is what Robin Li said at the signing ceremony where Tencent and Baiwan announced their cooperation.

Perhaps, this sentence is also the best description of the three giants being able to join forces.

In today's world of rapid capital expansion, the games among wealthy people may seem easy, but they are actually thrilling.

On the morning of August 29, Wanda Group, Baidu and Tencent held a strategic cooperation signing ceremony in Shenzhen and announced that they would jointly invest to establish Wanda E-Commerce Company in Hong Kong.

It was also announced at the ceremony that the total investment in the first phase will be approximately 5 billion yuan (approximately 810 million US dollars), with Wanda Group holding a 70% stake, Baidu and Tencent each holding 15%, and the total investment in the next five years will reach 20 billion yuan.

The three bosses were vague about the specific products and operating model of the new company. In the following week, countless interpretations of Wanda e-commerce emerged in the market, including some that were pessimistic about Wanda O2O. However, no matter how Wanda O2O develops in the future, the powerful combination of the industrial giant and the two Internet giants will be enough to create countless imaginations.

The O2O model has gradually taken shape after several attempts

What exactly is Tencent's O2O going to do? How did these seemingly unrelated and even competing rivals come together? Is their alliance really intended to challenge Alibaba as the legend has it? To answer all these questions, perhaps we need to go back two years.

In May 2012, when Wanda E-Commerce was first established, Wang Jianlin said that Wanda E-Commerce would not be the second Taobao or JD.com , but would combine Wanda's online and offline resources to form a unique model.

In order to attract talents, the ambitious Wanda launched a recruitment plan for 10,000 people and offered an annual salary of 2 million to recruit the CEO of Wanda e-commerce. In 2012, more than 40 candidates were interviewed. In December of the same year, Gong Yitao, the former manager of the e-commerce technology department of Google headquarters and senior director of international transaction technology of Alibaba, was confirmed as the general manager of Wanda e-commerce.

However, things did not develop as smoothly as Wanda had expected. In addition to the fact that Wanda's e-commerce "Wanhui.com" which was launched at the end of last year has been lukewarm, Wanda e-commerce has experienced drastic personnel turmoil in just over a year. Former Wanda e-commerce COO Ma Haiping, COO Liu Sijun and CEO Gong Yitao have all resigned one after another.

At the 2013 work summary meeting in January this year, Wang Jianlin said that Wanda e-commerce can only succeed and cannot fail. At the same time, he proposed development goals for the 2014 e-commerce project, requiring e-commerce to cover all plazas in 2014, focusing on members and data. It is required that the number of e-commerce members reach 30 million this year, including converting all 11 million members of Wanda Cinema Line into Wanda e-commerce members, and strive to have more than 100 million e-commerce members within three years.

At that time, Wang Jianlin still held the idea of ​​expanding e-commerce by increasing the number of members. However, this idea seemed to be completely overturned at a certain point in time. This change was subversive to the development direction of Wanda e-commerce to a certain extent. This change may be fixed at a "president-level" seminar within Wanda before the three companies announced their cooperation.

At the meeting, Wang Jianlin gave a comprehensive explanation of Wanda e-commerce and said frankly, "I learned a lesson from this meeting: don't rush to spend money to buy memberships. Excessive pursuit of the number of members will lead us astray... We want to increase the number of high-quality members and active members, so that the big data generated will be valuable."

Wang Jianlin also said, "Wanda e-commerce should not focus on increasing membership, but on product research and development and infrastructure construction. One is to do a good job of the technical platform and give full play to the role of cloud computing and big data; the other is to increase product research and development, and develop dozens or hundreds of innovative application software with independent intellectual property rights, so that every merchant feels that it is easy to use and voluntarily uses it, and consumers can also deeply experience it and are willing to use it. In this way, O2O will be successful."

Such a big change in ideas within half a year may be related to the step-by-step progress of cooperation between Wang Jianlin and Tencent and Baidu. According to a former Wanda e-commerce executive who told the reporter of Financial Weekly, "As early as the beginning of 2013, I went to visit Ma Huateng with Mr. Wang (Wang Jianlin), and then we had several meetings to discuss the possibility of e-commerce cooperation. Baidu also took the initiative to contact us. The final plan is very different from what we discussed at the beginning."

What is the current Wanda O2O model like? According to reports, Wanda mainly leverages its offline business advantages in the new e-commerce company; Baidu mainly contributes big data, and its group buying website Nuomi.com and Baidu Maps will also be connected with the new e-commerce company; Tencent mainly promotes the Fortune Payment Tool. There are two key words that cannot be ignored: universal points alliance and account interoperability.

According to Dong Ce, the current CEO of Wanda E-commerce, Wanda E-commerce will build the largest universal points alliance in China, and Wanda, Tencent and Baidu will build a big data alliance. This "points alliance system" is the core of Wanda's joint efforts with Tencent and Baidu to form an O2O enterprise, and is also the biggest difference from the business model of traditional enterprises such as Suning, which takes the supply chain as the core of O2O. The three parties will jointly maximize the role of points, and can use the value-added services of Tencent and Baidu online, and can also use them offline in Wanda Plaza, activating their own points systems and enhancing the stickiness of the three parties.

The premise of building this "points alliance system" is to achieve the interconnection of Wanda's accounts with Baidu and Tencent, so that the user's identity information forms a closed loop online and offline. What the user has done, bought, and watched online, where the user has been offline, what movies the user has watched, what he has eaten, and what clothes he has bought, the value of the data will be maximized by integrating online and offline information.

Cooperation driven by common interests

Even though the future of Wanda O2O is still unknown, Wang Jianlin has accomplished something seemingly impossible by bringing two giants, Baidu and Tencent, into one camp and establishing a company in the form of a joint investment.

The aforementioned Wanda e-commerce executive who left said, "This matter has been discussed for a long time. At the beginning, we only talked about cooperation, not joint ventures. In the end, we were able to come together in the form of a joint venture because Wanda took the lead. Ma Huateng and his team were of course very active, because such Internet companies cannot just float in the sky, and eventually they have to go offline, and they also want to go offline through Wanda."

As for the first "hand-in-hand" with Baidu through this cooperation, Ma Huateng said with a smile, "I would like to take this opportunity to send a message to the industry - you don't have to regard the competition among Internet companies as a life-and-death struggle. In fact, everyone has their own advantages and disadvantages. We should work together to do more things. As long as it meets the needs of users, any cooperation should be tried more."

There are no eternal enemies, only eternal interests. In this era of integration and competition, the three parties come together because of their ambition to develop O2O. However, it is not easy to achieve the integration of online and offline.

On the one hand, the accounts of Tencent, Baidu and Wanda users are currently separate. To achieve account unification, there will inevitably be a certain amount of competition among the three. On the other hand, there are a large number of Wanda Plazas, and it is also very difficult to fully implement integration.

E-commerce expert Zhuang Shuai analyzed that "the formats of third-party accounts are different now, and whose standard is the main one has not yet been determined. At present, it is very likely that Tencent will be the main one. Although Tencent is a minority shareholder, it has a strong account position and 'uses users to control the princes'. It definitely has a strong position among the three parties."

Ma Huateng also said at the press conference, "We only contribute our value as a connector. In addition, the terminal of this connector will connect many partners and commercial organizations, so today's cooperation is possible."

If Tencent is used as a universal super account both online and offline, this account can not only connect to the behavioral information of online users, but also associate the user's offline consumption behavior and obtain offline merchant resources. When all the user's information is recorded by Tencent's account and connected to online and offline resources, Tencent will not only gain more users and stronger user stickiness, but also a new profit point.

Another fact that has attracted outside attention is that Tencent already holds two e-commerce trump cards, Dianping and JD.com, and is now teaming up with offline commercial real estate giant Wanda Group to cooperate in Wanda e-commerce. Some people believe that there may be business competition.

Zhuang Shuai believes that "Tencent's cooperation with Wanda and Baidu is actually beneficial to JD.com. After the accounts are linked, it is very likely to promote the sales of JD.com's physical products and transfer offline consumption to online. For Dianping, Tencent is likely to resell part of its holdings to Wanda."

As for Baidu, another big player in BAT, it may have to do more hard work. Zhuang Shuai said, "Baidu may mainly provide Baidu Maps to obtain business resources and have the opportunity to develop city maps. In the future, its income may not be as high as Tencent's."

For Baidu, which has only one O2O website, Nuomi.com, linking with merchant resources through Baidu Maps' LBS technology is its most proficient O2O method. In fact, just four days after Tencent, Wanda, and Baidu announced their cooperation, Baidu held the Baidu World Conference at the China World Hotel and announced the launch of Baidu's "Direct Number" to provide solutions for the transformation of traditional service industries to mobile Internet. This move was considered by industry insiders to be a boon to Wanda's O2O project.

Is it a challenge to Alibaba or do they each have their own strengths?

Although Tencent Baiwan has repeatedly emphasized that it wants to build an O2O model that integrates online and offline, the decision to announce the cooperation when Alibaba is about to be listed on the New York Stock Exchange inevitably makes people suspect that it is intentionally competing with Alibaba. The industry even jokingly calls Wanda, Baidu and Tencent the "Anti-Ali Alliance."

Jack Ma, who is known for his outspokenness, was even reported to have said in a speech at Taobao City on September 2 that "the cooperation between Wanda, Tencent and Baidu in e-commerce is WTB (utopia). Whether they are WTB (playing Taobao) or BTW (by the way, just playing soy sauce), we will know in two years."

In this regard, Tencent Group Public Relations Director Zhang Jun told the reporter of Financial Weekly, "These comments are not important to us. We are doing our own thing and don't care about what others say. We have always emphasized that we are not doing e-commerce, but services. Now there are many misunderstandings about us from the outside world. They insist on saying that we are competing with someone, which is not the case at all. For us, the integration of online and offline is the most important thing."

Despite this, many people expressed similar views to the reporter of Financial Weekly. They all believed that the alliance between Tencent and Baiwan would have a great impact on Alibaba.

Zhuang Shuai said, "Wanda, Tencent and Baidu's O2O will definitely have a huge impact on Alibaba. However, Alibaba and Intime have only recently started cooperating in O2O, and the market is still blank, so it is hard to say who will win or lose.

Life services have always been a weak spot for Alibaba. If Tencent Baiwan explores the O2O model, it will be a big blow to Alibaba.”

Wang Xiaoxing of Analysys International believes that "Ali and Intime's cooperation is more focused on supermarkets and department stores, while Wanda owns not only supermarkets, but also commercial real estate, hotels, resorts and cinemas, covering a wider range."

"The direct competition between O2O and traditional e-commerce is relatively weak. The O2O model currently under discussion is based on Wanda's own resources. Since Wanda's own resources are relatively exclusive compared to other e-commerce resources, their impact on traditional e-commerce is not obvious for the time being," Wang Xiaoxing added.

It is worth mentioning that Wanda also contacted Jack Ma when it was looking for an e-commerce partner. The aforementioned former Wanda e-commerce executive said, "We communicated with many Internet companies at the time and also discussed with Alibaba, but ultimately failed to reach a cooperation agreement. Jack Ma himself has a close relationship with Shen Guojun, a director of Intime, so they finally chose to cooperate with Intime."

However, as to why the talks between Wanda and Alibaba collapsed, Zhuang said, "Alibaba's understanding of mobile Internet is not as deep and open as Tencent's. Its hardware and software technologies are insufficient. Although it can provide payment tools to connect with Wanda offline, it does not have membership management tools. In addition, Wanda and Alibaba have too many overlapping interests and different cultural concepts, so they will definitely not come together in the end."

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.