Explainer: the four big Chinese firms investing in shopping centre operator Wanda, and why they did it

Four of China’s biggest companies – Tencent Holdings, JD.com, Sunac China Holdings and Suning Commerce Group – have invested a combined 34 billion yuan (US$5.4 billion) for a total 14 per cent stake in Wanda Commercial, the country’s largest owner and operator of shopping malls and part of the Dalian Wanda Group led by billionaire Wang Jianlin. Who are the four and why did they put up the money?

Tencent Holdings: it is second time of asking for the social media and gaming giant, which led the investment with 10 billion yuan (US$1.6 billion) that got it a 4.12 per cent stake. Tencent had tried to forge an e-commerce joint venture with Dalian Wanda Group in cooperation with internet firm Baidu in 2014 as it went head to head with e-commerce firm Alibaba Group Holding for a slice of the growing pie of China’s rising middle-class consumption. But the deal fell apart in less than two years, with Wanda later saying that Tencent and Baidu did not pay their shares of the initial 5 billion yuan investment.

For Tencent, the latest investment “would be good value for money” as Wanda is still struggling to regain its momentum, said Zhu Wei, an associate professor at the China University of Political Science and Law. Its investment would also benefit Wanda in terms of branding and winning trust from consumers and government, Zhu said.

“By bringing Tencent on board, Wanda will not only benefit from a strong online consumer base, but will also be able to share risks – no matter whether economic or political, with China’s most flamboyant new economy representative,” he said.