Its social media platform WeChat has over 960 million active users and the media company itself has a market cap of $436 billion—84% as much as Facebook. In the last decade, Tencent has seen its share price increase by 2,636%. And yet most consumers outside China have never heard of Tencent.
That may be changing as the Chinese digital conglomerate begins a global push to take on Alibaba and create waves for its Netflix-like streaming media service, Spotify-like music platform and Apple Pay-like mobile payment service.
Massively popular and profitable WeChat is what Tencent is best known for. The WeChat messaging and mobile payments platform is what drove Tencent’s profits for the first half of the year to nearly $5 billion. But Tencent is now pushing its video platform out globally.
At the 2017 Cannes Lions, Tencent launched a WeChat channel for attendees so they could experience the platform firsthand, while marketing chief SY Lau spoke on panels to open up the Tencent brand to the world’s marketers.
Lau also spoke at the P&G Signal event in July to share his views on how brands can best connect with China’s consumers. “We built this city with ones and zeros,” is how he described Tencent. “Innovation is creativity made into something.”
Tencent Video also brought the house to the Cannes digital content fair. Its offerings ranged from original drama, to music videos to children’s animated series to documentaries, all with Chinese characteristics. (Many of these can be seen on Tencent Video’s YouTube page, which is unavailable in China.)
Tencent Video now claims 43 million paid subscribers. For comparison, Netflix just crossed 100 million subscribers. But important for Netflix is that about 52 million of its 100 million subscribers are outside the U.S. Alibaba’s video streaming service Youku Tudou remains behind Tencent Video and iQiyi for total subscribers.
Tencent isn’t just in the streaming platform business. Like Netflix and Amazon, Tencent is charging ahead with high profile original programming. And it’s not just Chinese. Founded in 2015, Tencent Pictures has already banked some hits. Box office hit Kong: Skull Island and this year’s phenom Wonder Woman were both produced by Tencent Pictures, for example.
And then there is music. Recently at Midem, the international B2B music conference, Tencent Music Entertainment Group VP, Andy Ng, talked about China’s turn away from music piracy and the maturing of the nation’s streaming music market. He reported that Tencent Music’s service has already reached 600 million active monthly users listening to 17 million tracks in their library. Of those, Ng said 60% are in English. In another promotional video, Ng says Tencent is actively recruiting music owners internationally to bring their catalogs into China and open a whole new landscape of sales.
Each boasting impressive digital touchpoints and scale, Tencent is going head to head with Chinese rival Alibaba. Both are actively courting international partners, each pitching itself as the best way for brands to reach Chinese consumers and their growing incomes.
In September, Tencent’s Lau was at New York City’s Advertising Week, talking up ad solutions that help brands “engage Chinese consumers on Tencent platforms both in China and while they travel abroad, including on the company’s popular social messaging app, WeChat.” Tencent also established a dedicated US-based support team to help brands use its platforms.
In the lead-up to Alibaba’s Tmall-powerhouse 11.11 Singles’ Day on November 11th, Alibaba has been hosting Gateway ’17 events in the US and Canada to attract midsize and small foreign brands to its platforms for reaching those same Chinese consumers. Quarter over quarter, Alibaba’s income has grown by 61% to a whopping $3.6 billion. Specifically, Alibaba’s digital media and entertainment revenue was up 30% QOQ with Youku video subscriptions increasing by 180%. Fitting with its international outreach, Alibaba also saw 115% growth in the period from its international commerce retail business.
— Vala Afshar (@ValaAfshar) November 2, 2017
Tencent is also huge in the gaming space. By revenue, Tencent Games is the world’s largest gaming company. Not surprising since Tencent Games controls some of the most popular mobile and PC games in China, a nation that makes up about 25 percent of the world’s game sales. In order to better align its gaming offerings with its social app WeChat, Tencent is rebranding its PC gaming store “WeGames.”
Books? Tencent’s profitable $6 billion publishing arm, including e-books, will soon be listing on the Hong Kong stock exchange.
In their battle for supremacy, Chinese tech giants are teaming up with Western brands. This year Netflix signed a partnership with Tencent Video competitor iQiyi, part of Chinese web giant Baidu. And last month, Tencent announced a partnership with Walmart that would leverage the WeChat social platform to help the retailer push ads and offers.
What’s more, Tencent has made inroads into Silicon Valley’s biotech market with hundreds of millions invested on startups from healthcare AI to food testing, prompting Tencent to open an office there. Here again Tencent will find its foe; Alibaba has had an active investment office in Silicon Valley for years.
So while you’ll be hearing a lot from Alibaba in the days to come as 11.11 sweeps the planet, Tencent would like to remind people that it empowers them to do more, and aims to “bring the greatest good to greatest number with technology.”