Tencent, Baidu and Wanda form e-commerce JV

News this week: Two of China’s leading Internet companies, Tencent and Baidu, have announced the formation of a new joint venture (JV) with Wanda, a real estate and movie theatre chain group. The JV is valued at about RMB 5 billion (US$814 million), in which Wanda will hold a majority 70% stake, while Tencent and Baidu will each hold 15%.

The JV will aim to gain more market share in China’s e-commerce market, which according to iResearch, online retail sales alone in China is expected to grow 46% to RMB 2.8 trillion (US$447 billion) this year.

The partnership will promote TenPay and Weixin Payment, Tencent’s online payment platforms. These platforms will be the preferred payment method for transactions across all of Wanda’s businesses. Meanwhile, Tencent will have access to movies, TV and online content owned by Wanda.

This post is excerpted from BSG's weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service. You can also follow us on Twitter for all the latest updates.

Alibaba partners Minsheng bank to provide financial services

News this week: The Alibaba Group has partnered with the China Minsheng Banking Corp Ltd to provide financial services ranging from wealth-management products, credit-card operations, and electronic banking. Minsheng is China’s seventh-largest listed bank, and the largest of those that are not state-controlled.

According to Minsheng’s securities filing with the Hong Kong Stock Exchange, direct banking accounts of its customers can now be linked with accounts under Alibaba’s online payment subsidiary, Alipay. Alibaba has previously signed similar agreements with other Chinese banks including the Bank of China and the China Construction Bank Corp (CCB). Alibaba has been offering micro-loans and money management services to small and medium-sized enterprises since 2010.

Separately, another Chinese Internet company, Tencent Holdings, has applied for a private banking license in China. The company owns a similar financial services operation to Alibaba in its Tenpay online payment system. Tencent’s application is currently being assessed by the China Banking Regulatory Commission (CBRC) for final approval.

This post is excerpted from BSG's weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service. You can also follow us on Twitter for all the latest updates.

Alibaba and Baidu join anti-fraud efforts in China

News this week: A group of China’s largest Internet companies have joined to form an e-commerce protection framework to counter online fraud under the guidance of China’s Ministry of Public Security. The group of 18 companies includes industry giants Alibaba Group, Baidu and Tencent Holdings among others.

According to the China Electric Commerce Association, Chinese online shoppers were defrauded of approximately US$5 billion in the 12-month period up to June 2012. The participating companies are looking to tackle online scams that include fake ads, selling of pirated goods and non-delivery of goods by fraudulent vendors in China.

Media reports quoted recent research data stating that total online sales in China are expected to reach US$356.1 billion in 2016, up from US$169.4 billion recorded in 2012. The Alibaba Group alone reportedly allocates up to 2,000 employees to monitor online security.

This post is excerpted from BSG's weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service. You can also follow us on Twitter for all the latest updates.

Tencent partners with American Express

News this week: China’s largest Internet company by revenue, Tencent Holdings Ltd, said last month that it will form a partnership with credit card company American Express to offer online, cross-border payment services.

Users of Tencent’s online payments service, Tenpay, will be able to buy goods from U.S. and U.K. websites via American Express’ online shopping service “globaleshop.” Terms and financial details of the deal were not disclosed.

According to data from Beijing-based research firm, Analysys International, Tenpay ranks second in China with a 21% share of China’s domestic third-party online payments market. Alipay, recently transferred from Alibaba Group to a private company owned by Jack Ma, remains the market leader with a 45.5% of share of the market.

This post is excerpted from BSG's weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service. You can also follow us on Twitter for all the latest updates.

500 million users

You might worry that I'm getting a bit obsessed by this China number game. I posted on Saturday about SMS frenzy over Chinese New Year and the week before about the prospect of half a billion mobile phones all ringing at once.

We couldn't help, then, but notice the posting on Read/Write Web about Tencent's QQ service which now has 572.3 million registered users. OK, so only 221.4 million of those are active, but still! It's an Alexa.com global top 10 site now and must be regarded as one of China's top purveyors of media and communications. Not much B2B focus yet, but with those numbers, as we've said before, there must be opportunities.

Did you know that, through Naspers' investment in around 36% of Tencent, this must also rank as one of South Africa's most successful offshore internet media investments in Asia. Over at Seeking Alpha, Siwei Zhong ranks it as "Out of the many Chinese internet related stocks, my favorite pick is Tencent Holdings (TCEHF.PK)". He notes, "Tencent still has a lot of room to grow in both increasing market penetration and by introducing new services".

Talking of size and technology, and on another tack altogether, we see that McDonald's is working together with DoCoMo to promote through mobile phones what is arguably America's greatest export success: obesity.