Baidu Inc. and Tencent Holdings Ltd. have withdrawn from a US$3 billion venture with Dalian Wanda Group, barely two years after it was launched with the aim to revolutionize mall shopping.
China’s largest search engine and its top internet company teamed up with billionaire Wang Jianlin’s flagship to set up ffan.com in 2014.
They wanted to become the world’s largest e-commerce platform by helping shoppers find stuff in malls and merchants manage payments and data.
But as of July 7, Baidu and Tencent had been replaced as shareholders by a company backed by Wang, according to a corporate filing.
The split came as China’s biggest technology companies burn billions of dollars in a race to become the go-to provider of online services such as food delivery as Tencent and Baidu focus on their own platforms.
The venture, which has pivoted toward online membership and rewards programs, was in part a response to the growing dominance of Alibaba Group Holding Ltd. in every sphere of internet commerce.
“They have failed to come up with a good value proposition for why customers should buy in and that essentially explains why it has fallen apart,” Sandy Shen, a Gartner Inc. research director, said.
It’s unclear why Baidu and Tencent jettisoned their investments.
But the three largest internet companies have begun to encroach upon each others’ turf and their businesses now compete head-on in everything from mobile software and online commerce to entertainment.
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