Tencent : Social Media to Digital Money

• 4 August 2017 | 1032 Views | By Mint2Save

The evolution of money from paper to plastic and digital has been one of the most phenomenal journeys of the mankind. What started as an alternative to barter, has now become the alternative to success, new ideas and even life. In coherence with the evolution of money, new methods to earn have quite a story of their own. A common man was once known to reap the monetary benefits from either selling goods or provide services (such a teaching, accounting). Now, arguably, money has established itself as a one word result for “skill”. Companies like Tencent are the future.

One of these methods, where skill is desired,  is the stock exchange or better known as the stock market. The stock market works on the buying and selling of shares of different companies. In this method, the person doesn’t have to do any physical work, they can directly buy and sell the shares to other users just by sitting in their houses, researching on the companies and having a deep knowledge of the technicalities.

With the evolution of the stock market, many complications began to emerge. Managing the stocks became a very dreadful task. In order to manage the stock market, some companies called holding companies came to business. A holding company is a company which holds the outstanding stocks of other companies. These companies doesn’t produce any goods or services, they own the shares of other companies and forms a corporate group with them. This reduces the risks of the owners as this can allow the ownership and control of different companies. This can reduce the tax payment of the company along with many other norms are being covered.

As the holding companies slowly began to expand, five stock market experts from China, founded their own holding company known as Tencent holding limited on November 11, 1998 in their home country China.  As the company expanded, it started its divisions in the field of media, social network, web portals, e-commerce, and mobile games, multiplayer online games, entertainment, payment systems, value added services on the internet and mobile phone and online advertising in China. The company has become the largest internet as well as gaming company in the world. This company played a very important role in changing the situation of China’s internet industry.

One of the most praised platforms created by the company is the QQ messenger. It was initially named OICQ which was based on ICQ instant messaging software, but because of some copyright issues, the company changed the name to QQ. The main source traffic in the messenger is the teenagers because of the cuteness factor of the application. The user interface of the application is very vibrant and attractive plus it provides online avatars, the users have to pay a significant amount for them. Avatar selling is a big source of income for the company these days. After the success of QQ messenger, Tencent launched its very own QQ mobile phone in the year 2000 which is filled with features like chat, mobile news, mobile game special ringtone etc. It was the first time when the company was enlisted in the Hong Kong stock exchange and all because of its QQ messenger and mobile phones.

After the company is settled properly, the founders of the company started to expand the company in the field of gaming and other online activities. They made their first investment in a computer game manufacturer known as Riot games and eventually acquired the company for USD 230 million in 2015.  Tencent also has minority stake in major game developing companies like Epic games, the creator of games like Unreal, Gears of war and Infinity blade. The company also has shares in Kingsoft network technology which is a subdivision of Kingsoft Corporation, Activision Blizzard, and Sogou.com. The company emerged out of nothing and eventually became a business tycoon, it also collaborated with some big names like BYD, Robot entertainment, Pocket Gems, Glu Mobile, Supercell, China Music corporation, Foxconn, Future mobility etc.

Ma Huetang in one of his speeches said:

“Dear guests, as we know the Internet develop fast. After four years of development Tencent now focuses on its QQ product which sustains 180 million messages per month. We strive to promote the concept of ‘Q generation’ and ‘Q life’. The company broke even as of last June. We have been practical and focused in our business development and the future progress is most crucial to us. Thanks!”

The latest and the most praised invention of Tencent is the WeChat messenger. WeChat is basically a message, picture and video sharing software which is launched by the company  on January 21 2011. The main reason for its success is its size, efficiency and creativity. The application is extremely small in size. It is fast and extremely efficient, as the QQ messenger, WeChat also has a very attractive user interface which makes it extremely accessible for the young generation of not only China but the world. According to a survey done by the company this year, WeChat has 890 million active users from around the world. An average person spends 90 minutes on WeChat everyday according to the reports. Well, the rise of someone may become the fall for another.

This case is true for Tencent and other leading companies of the world. The extreme popularity of WeChat operating system in china eventually resulted in the downfall of the sales of iPhones in the company. According to the reports, the sales went from 13.6% to 9.6% in the year 2016. It is expected that WeChat is going to end the kingdom of Alibaba in the Chinese market. The mobile payment market of WeChat has quadrupled its sales to 37%, while Alibaba’s Alipay has decreased from 79% to 54%. It is very clear that the war between these two massive giants is not going to end soon.

WeChat  is now headed to the American market, earlier this month, Tencent announced a partnership between WeChat and Citron which is a silicon valley startup in order to develop a cashless payment services focused on the Chinese travellers in the USA. The company is planning to provide the cashless services in16 other countries, including Japan and Singapore. This major step will clash with Alibaba’s cashless payment services which already running in 26 countries.

The war between Tencent and Alibaba was erupted because of a new front bike sharing. Tencent-backed  mobike which uses Wepay and Alibaba- backed Ofo which uses Alipay dominate the sector.

Tencent’s strong innovative approach has garnered worldwide attention and a follow-up of similar products to cater needs of the customers is expected soon.