Tencent flexes muscles on power of WeChat

Tencent flexes muscles on power of WeChat

Mon, 11/12/2017 - 10:27
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Tencent Shenzhen

STATEMENT: Global architecture firm NBBJ has created a striking headquarters for the rapidly growing Tencent. Photo: NBBJ/Terrance Zhang

November 2017 was a big month for Chinese technology giant Tencent, which became one of the five largest corporations in the world by market capitalisation and began moving into its new $US599 million ($789.8 million) headquarters in Shenzhen.

Tencent’s rapid growth, illustrated by its gleaming new headquarters designed by global architecture firm NBBJ, has been driven in no small part by the rising popularity of its super-app, WeChat.

Since being established as Weixin in Guangzhou in 2011, Tencent’s flagship social media application has achieved phenomenal growth, with the latest data showing there were 902 million average daily users of WeChat in September.

Delegates at Tencent’s Global Partners Conference, held in Chengdu in early November, were told there were 38 billion messages sent and 205 million connected calls each day in September on WeChat.

But it’s not only a communications app – WeChat is known as a super-app because it combines the same social media functions of Facebook or Twitter with powerful search engines and a comprehensive e-commerce offering.

And it’s that e-commerce offering that business should be tuned into, with the total number of monthly offline commercial transactions up 280 per cent, year on year, according to WeChat’s presentation.

Last month, WeChat’s growth was a large contributing factor in Tencent knocking off Facebook to become the fifth-largest company worldwide in terms of market value, which peaked on November 21 at $US529.9 billion ($696.5 billion).

Shares of Tencent have grown in value by more than 120 per cent in 2017, while analysts at Morgan Stanley predicted further upside, partly on the back of its strength in its mobile games business.

Tencent’s Honour of Kings mobile game had more than 200 million registered users in 2016, with its popularity contributing to revenue of ¥14.8 billion ($2.95 billion) in the first half of the 2017-18 financial year, according to the company’s latest financial report.

While WeChat dominates China, it is also seeking to bolster its presence in global markets, demonstrated by its significant investments in Elon Musk’s Tesla, US-based chat app Snap and mapmaker HERE Technologies.

In late November, Tencent also announced a move into Canada’s cloud computing sector, in partnership with Toronto’s OTT Financial Group.

In Australia, Tencent partnered with property buying portal Juwai.com to launch global real estate website haiwai.house.qq.com in January.