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Tencent to take WeChat global
Publication Date : 20-03-2014
Tencent Holdings Ltd, China's largest publicly traded Internet company by market capitalisation, will invest heavily to promote the international presence of WeChat, the company's popular mobile messaging application.
Pony Ma, founder and chief executive officer of Tencent, said on Wednesday the company will invest heavily in marketing and popularizing its WeChat services in international markets and boost the use of the payment function of the most widely used mobile social tool in China.
"We've enhanced our leading WeChat app from a communication tool to a multi-functional platform through initiatives such as smartphone games, official accounts and payment functions over the past year.
"All of our businesses are based on the WeChat platform, and we are confident that they will generate great returns in the long run," Ma said at Tencent's 2013 fourth quarter and annual earnings conference, where the Hong Kong-listed company announced that unaudited revenues in 2013 increased 38 per cent from the previous year, reaching 60.44 billion yuan (US$9.91 billion).
Ma didn't specify the amount of money Tencent plans to invest in WeChat. But Martin Lau, president of Tencent, said the company had invested hundreds of millions of dollars in the internationalisation of WeChat in 2013.
"About 100 million registered users of WeChat are based outside China. We will carry out more marketing events to further develop international markets in countries such as those in Southeast Asia," said Lau.
Over the past year, Tencent's earnings have been boosted by revenue from its diverse Web services as the Internet landscape in China rapidly shifts from being based on personal computers to mobile phones.
Its operating profit in 2013 was 19.19 billion yuan, an increase of 24 per cent year-on-year, while the operating margin decreased to 32 per cent from 35 per cent from the previous year, according to the company.
With Tencent's WeChat mobile messaging service, which had 355 million monthly active users at the end of 2013, the company is regarded as being in the strongest position to exploit mobile Internet in China.
The company, which makes most of its money from online games, has already benefited from WeChat, which has an integrated game center to help release mobile-based games. The news is likely to cheer some analysts who have concerns about the monetisation of the app.
The company also said that in the coming year it hopes to use WeChat to make money by enabling people to directly pay for goods with their phones as well as shop on e-commerce sites using the app. Lau, the company's president, said he is confident about the future of mobile payment.
Lu Jingyu, an analyst of mobile Internet with iResearch Consulting Group, said it makes a lot of sense for Tencent to use the internationalisation of WeChat as its core strategy to expand to overseas markets.
"It is indeed the most promising product Tencent has in the mobile Internet era," said Lu. "There is a lot of room for WeChat to grow in the international market, but the process will not be easy.
"Tencent has a vast user group in China. Many of its WeChat users in the country are users of its QQ, a dominating messaging service in the PC-based Internet era. But when expanding to other markets, Tencent has to build up its user group from scratch."