Wanda Group hopes online expansion will boost revenue
Chinese property operator ties up with UnionPay to simplify service, collect data
DAISUKE HARASHIMA, Nikkei staff writer
BEIJING -- China's Dalian Wanda Group wants to tap online resources in a bid to bolster its commercial property business, including the introduction of a smartphone payment system and the use of customer data for individualized promotion strategies.
The plans include a partnership deal with China UnionPay, a card payment service provider. The company also hopes to raise 10 billion yuan ($1.5 billion) from external investors to launch a new business, although a specific target has not yet been set.
The new strategy comes as brick-and-mortar retailers face an increasingly difficult business climate amid the growth of online retailing. Wanda Group hopes to boost existing commercial property operations by enhancing its online functions.
Retailers at risk
Chairman Wang Jianlin early this month said the strategy is the result of a three-year study the company conducted in exploring ways to take advantage of online resources.
Wanda Group already has a company dedicated to handling online-related functions, but so far it has not been fully utilized.
The partnership with China UnionPay represents the first major step in the new direction. The deal will install electronic readers for the UnionPay QuickPass smartphone payment service at 187 Wanda Group-operated locations, including Wanda Plaza commercial facilities, hotels and hospitals, among others.
Customers using the service do not have to manually sign or input passwords when making payments, expediting the process. They can also earn incentive points and use them at Wanda facilities.
Transaction data will be collected to analyze purchasing behaviors and used for such purposes as sending out personalized emails plugging products and services targeted to the customer.
This has driven traditional operators, such as supermarkets and department stores, into a corner. Wanda Group is no exception. The company closed half of its department stores in 2016.
Facing an increasingly difficult environment, China's physical-store operators are exploring ways to regain lost ground by combining current business with online resources.
There has also been a flurry of announcements since last year on moves for brick-and-mortar stores to team with online operators. Alibaba Group Holding in February announced a partnership deal with Bailian Group, a leading retailer.
In recent years, Wanda Group has focused on the operation of cinemas to take advantage of the fast-growing entertainment market as a way to make up for its shrinking retail sales. However, the segment last year showed signs of plateauing.
Wang noted that not many Chinese businesses have succeeded in effectively combining online and physical resources. He asserted that Wanda Group has an advantage in that the partnership will bring together the leading companies in their respective areas.
Wang also said Wanda Group will launch a new online business to further its plan to unite physical and internet resources.
According to sources close to the company, Wanda Group will announce details as early as July. The new business will seek to raise funds from companies and individuals for each project that is launched.
However, observers said the large debt that Wanda Group has accumulated over the years through its aggressive acquisitions may force the company to seek external funding. Early implementation of the new strategy may be essential to bolster the profitability of existing operations so the company can repay these debts quicker, they added.