Tencent is a Chinese company providing Internet services to hundred of million Chinese people. QQ, first popular product, is an instant messenger service everybody knows in China. Chinese Internet products lack of international recognition: this situation should change.
Current Transformation to Seize Opportunities
Since 2009, executives in charge of the strategy at Tencent have been working on the transformation of the company from a Chinese firm which services are still accessed through desktop computers for chat and games to an International firm providing mobile services and performing exceptionally well thanks to innovation and continuous efforts to improve the user experience.
The Largest User Base in the World after Facebook
An important asset of Tencent is the huge user base the company has. Current growth rate of WeChat is higher than Facebook 24 months after launch.
WeChat, the Key Product both for global expansion through smartphones and for major cash cow
WeChat was designed to be a success not only in China but also in the whole world. For the people who know the Chinese culture, we can expect more and more. Commercial launches by Chinese companies are very different from American companies.
Tencent doesn’t communicate the split of the user base per country. However, TechinAsia published our work showing growth in Singapore, Thailand, Malaysia, India.
Monetization will not be a problem at all. VALUE2020 is one the first firm who believed in the marketing potential of WeChat: access to e-commerce, games, advertising, CRM with one to one relationship and many other reasons.
Threats from Fierce Competition Fought with Innovation, Strong Partnerships and maybe Acquisitions
All Internet players are now focused on doing their best on mobiles and tablets. With the growth of WeChat, almost all the competitors are improving their respective service: Line, Kakao, Viber, Whatsapp, Facebook Messenger… We might expect also a new product from Google.
To win, Tencent develop strong partnerships in several countries and if necessary, the firm is ready for acquisitions.
Existing Risks related to Content and Sustainability
The State bans on the Internet unlawful content about illegal deals, pornography and drugs. If Tencent keeps respecting instructions, some users may feel unhappy to experiment limits in the service. This situation is a weakness against other players like Facebook.
Thanks to WeChat, Tencent is builiding a New Mobile Cash Cow. The current mobile strategy is similar to desktop strategy with QQ Instant Messaging in the past, and QQ Games today.
On WeChat product, the Question Mark of 2011 became a Star in 2012 thanks to a continuous high growth rate (better than Facebook, Twitter, Line…). After getting the highest market share possible in 2013 or 2014, the Star will become a Cash Cow 🙂