The 9th Asia Finance Forum, hosted by the Government of Hong Kong, was held in Hong Kong on January 18. Chairman Wang Jianlin was invited to give a speech about “Wanda Internet Finance O2O”, where he comprehensively introduced the structure, development strategy and goals of Wanda internet finance, marking Wanda’s first time of fully unveiling its internet finance strategy.
Following is the transcript of his speech.
My thanks to the Hong Kong Financial Forum for giving me this opportunity.
Discussing finance in front of Chairman Liu Mingkang makes me feel a little less of an expert, but nevertheless I have put together some of Wanda Group’s recent ideas about internet finance to share with you all.
First, I’d like to discuss the major concepts of internet finance.
1. The Origins of Internet Finance
The internet has developed so rapidly that almost every company has had to embrace it. Even the government suggested the idea of implementing an internet+ strategy. Wanda possesses the world’s largest offline resources and commercial platform, and because of these resource advantages, we made it our objective to enter internet finance.
With O2O, or rather internet+, we originally started with a retail framework, and as such, we recruited employees with an e-commerce background during the initial development of the platform. But we encountered some problems during this process, so we had to cut off this retail arm and pivot O2O into a new direction. As there are so many young mobile users today, and with the intention of trying to increase Wanda Plaza’s overall stickiness, we developed dozens of apps with independent intellectual property rights. I’ll give you an example: in all the new Wanda Plazas and Wanda Resorts, users can check for parking spaces prior to arrival on their phones. If there are limited spaces, users can book parking spaces in advance. Queuing at the cinema is a serious problem, but users can now pre-purchase tickets and choose their seats through our app. There are also restaurant queuing prompts where customers don’t have to wait around at restaurants anymore. Users can shop freely in Wanda Plaza and when the queuing number is close, restaurants will notify the users through an app minutes before their table is ready. However, we have also encountered many problems as we have promoted this model. These products simply burn through money fast and we were not profiting much. I told my team that even the best technology or product can’t survive if it isn’t profitable. A business cannot rely on storytelling alone. We have had many discussions since then, and after more than two years we finally came to a consensus. The development direction was to build an internet platform was finally determined around the concept of internet finance. This is the origin of Wanda Internet Finance. Will this internet platform expand its scope in the future with large-scale operations? It will, of course. We will keep exploring and adding profitable new business content.
2. Wanda Internet Finance Structure
Wanda Internet Finance business is comprised of five sections:
(1) Big Data Applications
Wanda owns big data from its shopping centers, hotels, theaters, tourist destinations, and a host of other offline venues. We expect that by 2020, our network will include 5000 large shopping centers, 2 million merchants, and consumption data from 700 to 800 million people. This massive amount of data will enable us to identify risks and digital application capabilities, which will generate significant value for itself.
(2) Credit Services
The possession of massive amounts of consumption data and consumer groups has become the foundation to our business, and even more so for...
The 9th Asia Finance Forum, hosted by the Government of Hong Kong, was held in Hong Kong on January 18. Chairman Wang Jianlin was invited to give a speech about “Wanda Internet Finance O2O”, where he comprehensively introduced the structure, development strategy and goals of Wanda internet finance, marking Wanda’s first time of fully unveiling its internet finance strategy.
Following is the transcript of his speech.
My thanks to the Hong Kong Financial Forum for giving me this opportunity.
Discussing finance in front of Chairman Liu Mingkang makes me feel a little less of an expert, but nevertheless I have put together some of Wanda Group’s recent ideas about internet finance to share with you all.
First, I’d like to discuss the major concepts of internet finance.
1. The Origins of Internet Finance
The internet has developed so rapidly that almost every company has had to embrace it. Even the government suggested the idea of implementing an internet+ strategy. Wanda possesses the world’s largest offline resources and commercial platform, and because of these resource advantages, we made it our objective to enter internet finance.
With O2O, or rather internet+, we originally started with a retail framework, and as such, we recruited employees with an e-commerce background during the initial development of the platform. But we encountered some problems during this process, so we had to cut off this retail arm and pivot O2O into a new direction. As there are so many young mobile users today, and with the intention of trying to increase Wanda Plaza’s overall stickiness, we developed dozens of apps with independent intellectual property rights. I’ll give you an example: in all the new Wanda Plazas and Wanda Resorts, users can check for parking spaces prior to arrival on their phones. If there are limited spaces, users can book parking spaces in advance. Queuing at the cinema is a serious problem, but users can now pre-purchase tickets and choose their seats through our app. There are also restaurant queuing prompts where customers don’t have to wait around at restaurants anymore. Users can shop freely in Wanda Plaza and when the queuing number is close, restaurants will notify the users through an app minutes before their table is ready. However, we have also encountered many problems as we have promoted this model. These products simply burn through money fast and we were not profiting much. I told my team that even the best technology or product can’t survive if it isn’t profitable. A business cannot rely on storytelling alone. We have had many discussions since then, and after more than two years we finally came to a consensus. The development direction was to build an internet platform was finally determined around the concept of internet finance. This is the origin of Wanda Internet Finance. Will this internet platform expand its scope in the future with large-scale operations? It will, of course. We will keep exploring and adding profitable new business content.
2. Wanda Internet Finance Structure
Wanda Internet Finance business is comprised of five sections:
(1) Big Data Applications
Wanda owns big data from its shopping centers, hotels, theaters, tourist destinations, and a host of other offline venues. We expect that by 2020, our network will include 5000 large shopping centers, 2 million merchants, and consumption data from 700 to 800 million people. This massive amount of data will enable us to identify risks and digital application capabilities, which will generate significant value for itself.
(2) Credit Services
The possession of massive amounts of consumption data and consumer groups has become the foundation to our business, and even more so for personal consumer credit reports. The top five US credit companies are now worth billions of dollars. The largest credit information company, despite just a few million customers, has a market value of more than $60 billion, which quickly highlights the importance of credit information. As Wanda’s shopping centers reach consumers within a 5km radius of the building, we can accurately measure and document the consumption habits and frequency of repeat consumers. We are also able to take information such as cash flow and profits from retailers. This was the foundation for Wanda’s credit services and the reason we decided to start this business. Looking at the astronomical value of the top five US credit companies, China has 1.35 billion people, five times the population of the United States, meaning there is great potential to create an even more valuable credit company in China. We must integrate precise corporate and personal credit assessments to create tremendous online and offline value for credit services.
(3) Internet Credit
The Shanghai Free Trade Zone will now issue Wanda with the first national internet credit business license, which means we can carry out online crediting at Wanda’s shopping centers. In the future, we may also gradually extend these services throughout the entire Wanda ecosystem. This platform is very large, account owners are usually small- to medium-sized businesses, these companies possess limited financial capacity, and the demand for loans is extremely urgent.
(4) Mobile Payments
Because we are engaged in internet credit, we need our own payment platform. That is why we acquired 99Bill two years ago. 99Bill is a mobile payment company, currently ranked fourth in the country, and it possesses the most comprehensive set of payment licenses in China. It is able to achieve online, offline, and all other methods of payment, and the acquisition formed a complete industry chain for Wanda’s internet credit. The development of our payment systems from the beginning was made for mobile, and the full name is "mobile online payment system". Last year, more than RMB 20 billion was invested in building a large-scale data processing center in Chengdu, and it is now fully operational.
(5) Ffan Card
This is a Wanda innovation for the world. We have been thinking about how to bind the customers together. There must be a connection, so we designed the “Ffan Card”. With this card, you can enjoy applications and services in all the Wanda Plaza shopping centers and partner outlets. The original idea was to provide cardholders with discounts, but then we decided that wasn’t enough. After 99Bill was brought on board, you would need to use 99Bill to make payments. In order to increase the number of users and user activities through the Ffan Card, we have now developed a new model of cooperation with the national public transport system. The first launch will be in Beijing next month and soon after it will be synchronized with the nationwide public transport system. Ffan Card users will be able to enjoy certain benefits when they take the bus and subway. For example, if the fare is RMB 5, Ffan users will need to pay only RMB 4.5. Additionally, points can be redeemed, and we are also cooperating with airline loyalty programs. Within the next couple of years, Ffan Cards will continue to penetrate large service sectors so that points may be shared across all services. For example, flight miles can be replaced with bonus points and other points for consumer goods.
Ffan recently reached an agreement with one of China’s financial giants. This financial institution has agreed to apply its credit card functionality onto the Ffan Card, meaning that, in the future, the Ffan Card will have the same functionality as a credit card. As it has not officially been announced yet, we will not elabora
