Introduction of Tencent
Tencent is a China-based investment holding company that was founded in 1998, and one that provides a wide range of internet services. The company’s headquarters are located in Shenzhen, China. Some of the ventures that Tencent engages in include entertainment, media, and value added internet and phone services. Currently, Tencent holds a significant market share of China’s internet services.
The company has continued to come up with innovative products including Tencent QQ, which was first released in 1999. The company’s Mobile QQ was launched as a joint venture in the year 2000 and it went on to become the third largest mobile phone service provider in the world. Mobile QQ revolutionized communication at the time of its inception because it allowed users to send messages directly to personal computers. Tencent started trading publicly in June of 2004 at the Hong Kong Stock Exchange.
By the year 2013, the company had an annual total revenue of $9.913 billion dollars and an average growth rate of approximately thirty-eight percent. WeChat is one of Tencent’s flagship products and it has often served as the company’s strategic tool for growth. Consequently, WeChat has spawned various other products and services for Tencent.
Tencent’s Market Position
Tencent has mostly centralized its operations in China but the company formally launched its international operations in 2005. The company ventured into worldwide market through an international business group. Currently, Tencent has market presence in North America, Europe, and Southeast Asia. Since the company became an international outfit, it has also become the fourth most innovative company in Asia according to “Forbes Lists”.
In 2003, “Forbes” listed Tencent at position eighteen in the category of World’s Most Innovative Companies. Tencent’s entry into the international markets was also aided by the company’s acquisition of overseas brands such as Epic Games and Flash Sales Website Fab. Both of these companies are based in the United States and they have since been incorporated into Tencent’s portfolio.
In china, Tencent remains a dominant market force on several fronts. First, two of Tencent’s third party payment platforms are widely used within China. Both WeChat and Tenpay are ranked third and fourth respectively when it comes to the most regularly used third-party payment platforms in the country. The top two market performers in this category are Alipay and Paypal, and they both have presence around the world.
Tencent’s most successful product integration happened in 2014, when the company partnered with Didi Taxi as method of raising the consumer profile of WeChat’s third party payment application. Tencent has an absolute market grip on the Chinese mobile market through its product integration efforts.
For instance, Tencent has integrated seven distinct businesses with the aim of catering for customers’ needs from a single location. Tencent’s leading products in china include; Tencent QQ- an online instant messaging software, Qzone- a restrictive multidimensional communication software, and Tenpay- a secure online payment platform.
WeChat is one of the most recent additions on the Tencent’s innovative products profile. WeChat began as a mobile phone based application that was provided free to customers. Through this free application, customers were able to send instant messages and share photos and videos across various platforms. WeChat was instituted in the year 2011 by a dedicated team of designers. WeChat functions are similar to those of WhatsApp, another popular mobile-based communication application.
However, WeChat provides customers with the ability to communicate through video interfaces. In addition, WeChat has a functionality that integrates geographical positioning with communication thereby giving communicators the ability to discover other like-minded individuals who are close to them. In total, WeChat has four distinct features; Shake, People Nearby, Moments, and the Public Platform.
Research for the development of the WeChat application began in 2010 at Tencent’s Research and Project Centre. In China, the first final version of the application was known as ‘Weixin’ but it was later rebranded to ‘WeChat’ in order for it to have a more ‘international’ appeal. Currently, WeChat boasts of more than six hundred million users per month. The number of active users has also been on a constant growth trajectory.
The WeChat Public Platform is intended for use by both individuals and companies. The platform allows users to create accounts that can consequently attract subscribers. ‘Service’ WeChat accounts allow organizations to interact better with their customers. The ‘Shake’ and ‘People Nearby’ applications are designed as tools of social interactions where people could chat with other individuals in close proximity. WeChat’s ‘Moments’ platform is designed to allow sharing of media including photos, videos, and music files.
‘Moments’ has been instrumental in increasing WeChat’s overall user-base by a factor of one hundred and twenty one percent per year for the last two years. Tencent used WeChat’s popularity with users to launch a mobile-based payment system. WeChat Payment contains elements of Tencent’s Tenpay to create a system that allows customers to make payments for goods and services.
WeChat Payment has since partnered with other major brands such as Starbucks and McDonald’s. WeChat has also partnered with Didi Taxi through a US$15 million direct investment by Tencent. The Didi-WeChat acts as a connector between passengers and taxi drivers, and also offers a payment platform for services rendered.