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Wanda Group, China’s top commercial property conglomerate which is also engaged in tourism, hotels and entertainment, is teaming up with Chinese Internet giants Tencent and Baidu to set up an e-commerce joint venture by investing 5 billion yuan (around US$814 million) on aggregate. Wanda will hold a dominant 70% stake in the joint venture, while Tencent and Baidu will own 15%, respectively.

According to the agreement, the three partners will deepen their collaborations by connecting account systems, sharing traffic, membership benefits, big data, payment and online finance, etc.

Wang Jianlin, chairman of Wanda, added they planned to introduce new investors and the investment amount is expected to reach 20 billion yuan in future five years.

Wang emphasized that the new joint venture will integrate Wanda’s offline retailing resources with location, search and communication services offered by the two partners to build an O2O e-commerce platform. Wanda E-commerce is engaged in sell services rather than physical products, he added. “O2O is the biggest pie in e-commerce and this is just the beginning,” said Wang.

Some analysts pointed out that Tencent’s previous deal with JD, China’s No.2 e-commerce platform by market share, might be one of the reasons for why Wanda E-commerce gives priority to O2O sector. According to the agreement Tencent inked with JD earlier this year, JD will be Tencent’s premier partner in physical product e-commerce industry, and Tencent now only maintained virtual product e-commerce and O2O local life businesses.

The joint venture has named Dong Ce, former executive of luxury product e-commerce sites Jiapin.com and Xiu.com, as CEO. Gao Xia, former vice president of Gaopeng, and Cao Dajun, former CIO of Newegg Greater Los Angeles Area, are respectively appointed as COO and CTO of Wanda E-commerce, according to people with knowledge of the matter.

This tie-up is one of Tencent’s moves to challenge the dominance of Alibaba in China’s e-commerce sector. In the same deal mentioned-above, Tencent acquired a 15% stake in JD. It also transferred its e-commerce sites to JD and allows JD to integrate its service in WeChat and Mobile QQ to commercialize its huge user base. JD grows and catches up with Alibaba rapidly after the cooperation.

Wanda’s establishment of e-commerce join venture us to recall the widely-discussed anecdote between Wang Jianlin and Jack Ma, president of Alibaba. Holding divergent views on how China will shop in 10 years, the two Chinese tycoons almost made a 100 million yuan (US$16 million) bet on the future of Chinese retail sector. In 2013, Wang offered a bet to give Ma 10 million yuan if online consumption has surpassed 50 percent of total retail volume in ten years, and Ma should give Wang the same amount should online consumption fall short.