In essence, Ffan is an open platform that aims to redirect online users to all kinds of offline services, such as parking, reservations at restaurants, and purchasing film tickets and products at discounts. The service now integrates a digital membership system, a rewards & points system, online payment service and online marketing programs.
It is obvious that Ffan is targeting at both B2B and B2C models. Through cooperation with business partners, the platform can better connect all member customers for effective promotion programs, unified rewards and payment systems. On the other hand, it will help Wanda increase user stickiness by converting one-time customer to more loyal customers, or membership.
As online shopping has surged, both of these models are of increasingly important for traditional retailers like Wanda, which has been squeezed in sales by “showrooming, ” a phenomonen where shoppers browse products in stores that then buy from e-commerce sites.
It is easy to speculate that Wanda Group will take the helm of the joint venture, as the real estate conglomerate maintains a 70% stake in the company, while Tencent and Baidu share the remainder evenly. However, the tie-up will also help the two internet giants to further expand into the lucrative e-commerce market by capitalizing on existing resources, Baidu through maps and Tencent through WeChat’s commitment to payments and social.
Both Baidu and Tencent have reinforced their commitment to heavy early investment in O2O recently. Tencent has made moves to take control in the food delivery and car-hailing markets, while Baidu recently announced a 20 billion RMB investment in O2O group-buying sit Nuomi to fight off competition from private market players including Meituan.
Alibaba has also taken on the O2O challenge, investing $692 million USD in Intime Retail, one of China’s leading department store operators to develop O2O business. Moreover, the company has launched Miaojie, a service similar to Ffan which helps all physical department stores to tap O2O markets. According to the company, Miaojie is expected to cover 1000 stores across 15 Chinese cities by the end of 2015.
JD is also pushing its O2O business with the support of powerful logistic system, mainly through cooperation with offline stories including supermarkets, convenience stores and fruit and flower stores. Although JD’s O2O business still steers clear of department stores, it would be a rational progression given its dominance in the sectors of consumer electronics, cloths and mother & baby products.
Image credit: Ffan