The explosion of online shopping in China has gotten the attention of one of the country’s biggest operators of offline department stores, hotels and shopping malls.

Beijing-based Dalian Wanda Group announced today a joint venture with two of China’s biggest Internet companies, leading search engine Baidu Inc. and gaming and messaging powerhouse Tencent Holdings Ltd., on a joint venture with $814 million in initial capital. Wanda will hold a 70% stake and Tencent and Baidu 15% each.

The focus of the joint venture is to tie together the Internet and bricks-and-mortar stores, a connection often referred to as O2O—online to offline—in China.

“The integration of online and offline business is an inevitable trend in the development of the e-commerce industry,” Dong Ce, the CEO of the new joint venture said in a statement announcing the project. He said the joint venture, called Wanda E-commerce Company for now, will be “the world’s largest O2O platform.”

The three companies say they will work together to develop payment and e-commerce financial products and a loyalty program, and that they will jointly share data and work together on sharing Wi-Fi resources, which could make it easier for consumers with smartphones to access web-based content while in Wanda properties.

Wanda operates 83 department stores in China and projects by 2015 it will have 125 stores covering 334 million square meters. It also operates 93 Wanda Plaza developments that include commercial properties, office space, luxury hotels and apartments.

All of Wanda’s commercial centers, hotels and resorts will be equipped with e-commerce services by 2015, said Dong, who also predicted membership in Wanda’s e-commerce service will exceed 40 million this year and 100 million in 2015. He said in the statement that a “very cool new name” for the joint venture will be announced shortly.

The announcement represents another step by Tencent and Baidu to ally themselves against Alibaba Group Holding Ltd., China’s dominant e-commerce company. Tencent invested nearly $215 million earlier this year to acquire a 15% stake in JD.com(Tencent invests in JD.com http://www.internetretailer.com/2014/03/10/chinas-largest-e-retailer-pairs-web-powerhouse-tencent), Alibaba’s biggest rival and the No. 1 online retailer in the Internet Retailer China 500. (Alibaba is not ranked because, like eBay, it is not itself a retailer but rather the operator of an online shopping portal.)

Baidu bought a majority stake in group-buying site Nuomi last year, putting it in direct competition with Alibaba. The two companies have been long-time rivals. Alibaba does not allow Baidu spiders to crawl Alibaba marketplaces Taobao and Tmall, instead forcing consumers to go to those shopping sites to see what’s on offer rather than starting their shopping trips on Baidu.

Alibaba also has positioned itself to combine online and offline shopping. The company, which has announced plans to go public on the New York Stock Exchange this year, invested $692 million this year in InTime Retail Group, which operates 36 department stores in China.

While Alibaba dominates the online sales of physical goods in China, but “given the rise of mobile, there are huge e-commerce opportunities in the offline services market such as hotels, restaurants, movies, beauty salons and so many other services that can only be consumed in the physical world,” says Julia Q. Zhu, who formerly worked at Alibaba and later founded Observer Solutions, a China e-commerce research and advisory firm in Washington, DC. “For example, restaurants in China are now using Tencent’s Wechat to let customers to reserve tables, order food and complete payment before they even got to the restaurants. O2O is the next huge thing in e-commerce in China now. Alibaba is trying to win the O2O markets and so are Tencent and Baidu.”

The competition among these rich and rapidly growing Chinese companies took on another dimension this week with the release of the latest Bloomberg Billionaires Index, which listed Alibaba founder Jack Ma as China’s wealthiest man, with net worth of $21.8 million. No. 2 was Ma Huateng, chairman of Tencent, with wealth estimated at $5.5 billion, followed by Baidu founder Robin Li. However, according to Forbes magazine, Wanda founder Wang Jianlin is worth $15.8 billion. Wanda’s holdings outside of China include the AMC movie chain in the United States, which the Chinese company purchased for $2.6 billion in 2012.

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