What is Tencent?

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What is Tencent?

Based in Shenzhen and founded in 1998, the Chinese company Tencent enjoys huge popularity – and profits – in China.

Its cute penguin symbol is as familiar to Chinese children as the McDonalds “golden arches” logo is to children in the West, says the BBC’s China media analyst Kerry Allen.

“Tencent is thought of as so much more than just a Chinese company in China – it has gained a reputation as a family-friendly organisation that connects families, friends and work colleagues in a digital age,” she said.

“It has a business model that other Chinese companies can only envy – it can reach an audience of, basically, everyone.”

But many people in the West have never heard of it.

That doesn’t mean it isn’t present in our everyday lives, though – Tencent also owns chunks of some of Western culture’s most popular games, music and movies.

WeChat

Like Google’s parent company, Alphabet, Tencent has a broad portfolio of interests, although arguably it remains best known for its messaging services.

US president Donald Trump singled out the app WeChat in his most recent executive order, which demands US firms stop doing business with it.

WeChat has over a billion users, both inside China and around the world – the Chinese version is called Weixin.

It is often compared to WhatsApp – and certainly it is widely used for messaging – several US messaging apps and social media sites are banned by the Chinese state so you can’t (officially) Facebook message a friend in Beijing, for example.

But there’s a lot more to WeChat than messaging.

It’s more akin to a separate operating system: just like you might use Google’s Android or Apple’s iOS for a variety of tasks, it is used to read news, pay bills, order transport or food, and run small businesses.

The firm has not revealed just how profitable WeChat is on its own, but it is clear that Tencent – as a whole – is thriving.

Earning results for the first quarter of 2020 showed a total revenue of 108 billion Chinese yuan ($15.2 billion) – an increase of 26% year-on-year, despite the coronavirus pandemic. Alphabet’s revenue for the same period was $41.2 bn.

Crunchbase’s Tencent entry lists 479 investments, with a fund totalling $6.6bn. It would be tedious to go through them all, but let’s take a quick look at some of them.

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