Joint ventures in the Chinese e-commerce market

Abstract

This paper is intended to inform readers about the characteristics of a joint venture contract included in the Chinese digital market landscape. As China is a country that is increasingly at the forefront of technology, the digital market is highly developed and exploited by an increasing number of users throughout the country. The players who appear in this scenario are more and more numerous and the possibilities of entry as well as the strong competition can lead companies to evaluate different options, including looking for commercial partners to enter into a joint venture. Therefore, a path was created to make any interested readers understand the characteristics of this contractual collaboration and provide a picture of the Chinese digital market, analyzing a case study of a Chinese joint venture within this context. The first chapter illustrates joint ventures, a collaboration agreement between several parties, aimed at achieving a specific purpose or carrying out a project. The chapter aims to describe this type of collaboration, distinguishing the two existing types and the related contractual characteristics both in generic terms and with a focus on China. The second chapter provides a general overview of the e-commerce world. It starts with an illustration of the entry barriers and the general market situation, to continue with a look at the B2B and B2C digital market. In the second part, the major platforms in the digital market scenario are presented and the advantages and disadvantages of entering into a joint venture within this sector are exposed. The third chapter presents a case study concerning a joint venture signed by the companies Tencent, Dalian Wanda Group and Baidu. This part introduces the actors as well as their opponent, Alibaba. The goal is to provide readers with the necessary information regarding the various companies in order to facilitate understanding of the facts described below. In the last section of the chapter the actual case is presented, starting with the signing of the joint venture agreement and then following the course of events and finally analyzing the possible causes of the failure of the collaboration.