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HONG KONG (Reuters) – China’s biggest social network and gaming firm Tencent Holdings, which last week reported forecast-beating quarterly results, is close to making Malaysia the first foreign country to roll out its WeChat ecosystem, an executive told Reuters.

FILE PHOTO: Tencent’s booth is pictured at the Global Mobile Internet Conference (GMIC) 2017 in Beijing, China April 28, 2017. REUTERS/Jason Lee/File Photo
If you’re using a messaging app in China, chances are it’s owned by Tencent – a leading provider of web-based services in China that owns WeChat, as well as a whole host of social media platforms, entertainment subsidiaries and payment services. With an increasing amount of global brand awareness, the time had come for Tencent to expand its corporate typographic voice in line with its ambitions. The company approached Monotype to design a bespoke typeface, based on its existing logo, that could convey its vision of “innovation, responsibility and enablement”.

Tencent has made a “breakthrough” in gaining an e-payment license in Malaysia for local transactions, and plans a launch early next year, senior vice president S.Y. Lau said in an interview.

The move pits Shenzhen-based Tencent against rival Alibaba Group as they scramble for new growth opportunities outside China. Tencent this week became the first Asian firm to enter the club of companies worth more than $500 billion, and on Tuesday surpassed Facebook in market value.

“Malaysia is actually quite large in the sense that we have 20 million WeChat users, huge potential, and the market is quite warm towards internet products from China,” Lau said.

Southeast Asia, home to more than 600 million people and some of the world’s fastest-growing economies, has been a key battleground for China’s tech titans fighting for deals. Ethnic Chinese make up more than a fifth of Malaysia’s population.

WeChat Pay and Alibaba’s Alipay, which dominate China’s digital payment market, have sought to expand their global footprint, although that push has so far been limited to payment services for Chinese outbound tourists. They can scan-and-pay for purchases in 34 countries or regions via Alipay and 13 via WeChat Pay, according to the companies.

Alipay’s parent company Ant Financial has joint ventures in seven markets for local digital payments services, which operate independently under the partnerships’ brand names.

Alibaba is looking to build a global payment system, while Tencent is more interested in generating traffic for WeChat – two different strategies, some bankers and investors say.

WeChat has more users, but Alipay’s aggregate transaction volume is higher, according to JP Morgan’s John Hall, though other investors note that WeChat Pay can also process large transactions if it’s used on e-commerce platforms.

GLOBAL EXPANSION

One challenge for Tencent, say analysts, is that its success in China cannot be easily exported to other markets.

Tencent is “not in a hurry” to speed up its overseas expansion or increase the monetization rate of its digital assets, Lau said.

“We walk our own path at our own pace … and, to be honest, there is really quite a lot to do in China,” he said.

WeChat, which has ballooned from a messaging app to an all-in-one platform with 980 million monthly active users, could be the “killer product” to spearhead expansion abroad, Lau said, as its embedded payment function draws more services.

WeChat, with an open platform of mini-programs, was a key revenue contributor for Tencent in the third quarter. Social and other advertising revenue rose 63 percent, while payment and cloud helped “other business” post a 143 percent jump

“Honour of Kings”, Tencent’s top-grossing battle game that led an 84 percent increase in quarterly smartphone gaming revenue, also owes its success to the network help of WeChat, and is expected to find it tougher to crack Western markets, analysts say.

Tencent this month delayed the launch of the game’s U.S. edition, “Arena of Valor”, to next year to “further polish additional gameplay and social features”.

After games and social media, most of Tencent’s other businesses are in digital content, including Spotify equivalent Tencent Music and YouTube equivalent Tencent Video, which also makes its own dramas.

CULTURE CHALLENGE

Lau said the ultimate aim was to export culture from China to the rest of the world, rather than the other way round, which he acknowledged was challenging.

“What we’re aiming to create is ‘super IPs’ (intellectual property) that leverage our different businesses from upstream to downstream,” Lau said, citing Disneyland and the James Bond movies as successful practices in the West.

A big business for Tencent’s recently listed publishing arm, China Literature, is to sell its popular novels and have them turned into dramas and video games by Tencent’s other business lines.

Tencent this month announced a plan involving 10 billion yuan ($1.51 billion) of investment to boost its creative content ecosystem, though it gave no time frame for the investment.

Company president Martin Lau – no relation to S.Y. – said on an earnings call last week that Tencent would keep investing in digital content, especially online video, to draw more time from more paying customers.

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Overseas acquisitions will remain a key way of enhancing Tencent’s global access and competitiveness, S.Y. Lau said.

Independent technology analyst Richard Windsor said Tencent’s 2016 acquisition of Supercell gave it a strong position in gaming, while the move to buy a stake in social media firm Snapchat is another piece in the jigsaw.

“It increasingly looks as if Tencent is embarking on a circumnavigation of the digital life pie in order to build an ecosystem to challenge the Google, Apple, Amazon, Facebook dominance of consumer digital services,” he said, noting it’s at a “super early stage” in that process.

Tencent will likely seek more overseas acquisitions, Windsor added, which, beyond being expensive, could challenge Tencent in integrating all its digital assets at home and abroad.

Tencent has struggled to monetize its dominance over the Chinese digital life, he said, adding that’s why he sees more upside in Tencent’s market valuation, and prefers it to Alibaba.

Henry Sapiecha

kylie bartlett social media marketing success image www.socialselect.net

Kylie Bartlett: From the streets to social media.

When Kylie Bartlett was 18 she thought her life was pointless and directionless. She was wandering the streets not only trying to find a purpose, but also trying to find somewhere to live.

Three years later, she had started her first business, and 12 months after that bought her first home. Now, many years later, she is one of Australia’s leading social media experts, has just finished production of an online TV series – SME TV – helping small businesses solve social media problems, and has self-published her first business book, Friends with Benefits.

I had a teacher tell me I was stupid and that the only way I could possibly attend university would be ‘serving chips in the canteen’.

So, what changed?

“To be honest I went to a three-hour motivational talk at the Wayne Berry Top Gun Business Academy and I saw how I could change my mindset,” Bartlett says. “I became obsessed with psychology and started studying everything on the subject.

“Part of my problem was that at school I had plenty of energy but I wasn’t really interested in the subject matter. I was constantly getting suspended and Dad wanted to put me in the army to give me direction. I had a teacher tell me I was stupid and that the only way I could possibly attend university would be ‘serving chips in the canteen’.”

Bartlett took on a series of jobs while studying various psychology courses and stumbled into the area of training. She freelanced for a couple of years before realising she could go out on her own.

“It was a big decision to tell clients that I had been working for that now I was going to be a competitor to them,” she says. “I started my company, Pinnacle Training Solutions, with $5000 to my name and I was eight weeks pregnant.

“When I won my first contract, which was a six-figure sum, it put me on the path to success and by the end of my third year I was turning over in excess of one million dollars a year.”

Bartlett sold her company just before the GFC for a healthy sum and then had to decide what to do next. She travelled to America to learn about social media where she spent years studying with experts Steve Harrison and Eben Pagan.

“I knew social media was going to be big and I thought I am very good at connecting and networking,” she says. “I just wanted to know more about social media so I thought I would head off to the States where they were more advanced than us.”

Bartlett is now flown around the world to guide companies on social media strategy and saw making a TV series as the next logical step.

“The small business TV show runs for 12 episodes and I deliberately targeted small businesses that have a strong offline presence to help them transgress to an equally strong online presence,” Bartlett says. “The point was to separate them from their competitors and show how they can make money online too no matter what their service or product.”

Bartlett concentrated on her home town of Geelong after receiving financial support from the Geelong Chamber of Commerce.

“I wanted to start off local and then roll out the show across Australia,” she says. “What a lot of small businesses still struggle with is that there is no gatekeeper involved, it is just you and the public. There is no frame of reference or regulatory body when it comes to social media so you need a definitive strategy to be able to build your audience.”

Jack Rabbit vineyard, King of the Castle cafe, Geelong Animal Welfare Society and Truffleduck were among the businesses she worked with.

“I was very sceptical about social media,” says Deb Nash, co-owner of Truffleduck. “Kylie definitely had to win me over and she has.” The catering business, which was established in 1988, had no social media presence until Bartlett came in to help.

“We started working with Kylie 18 months ago and she set up a social media strategy for us to interact not only with our customers but also other local businesses. We have a strategy for our daily content, how to respond to customers and how to interact with businesses in the area.

“We use Instagram, Facebook and Twitter and our business has grown substantially from this.”

Bartlett believes “small is the new big” and that the evolution of social media is changing so fast it is hard for big companies to evolve at the same pace as a small business can.

“Corporates struggle to react fast enough to an issue and by the time they have had all their meetings and planned their strategy, social media has already taken over,” she says.

“We are all our own media company. You need to think carefully about your business culture, what it stands for and also what it stands against. You need to plan carefully to get your content strategy right internally before you voice it externally.”

Henry Sapiecha
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