Author: Yucheng Mu (Francis), (10.17.2021)
I am going to introduce a company named Tencent. It is a famous technology company for its social network systems and video games, and investments strategies. As the top five global Internet companies by market value, Tencent is a leading company with the market value of domestic Internet companies. In the case of high volume, the total annual income still maintains growth of more than 20% (Tencent, 2021).
When did the business commence?
In 1998, Tencent was founded in Shenzhen, China, for its headquarters. The principle of Tencent is to use technology for good. In 1999/02, the famous application named QQ came to the world. In 2003, QQ games and Tencent. Com came online.
Furthermore, in 2004, Tencent was listed on Hong Kong’s stock market. In the following, 2007, at the same year, Tencent Charity Fund and the income revenue have over 10 billion RMB for the first time. In 2011, WeChat came out and published the open operating platform strategy. Also, in 2011, the wide-entertainment strategy, and the WeChat Game Center and WeChat Pay online. In 2014, the WeChat “Hong Bao” and the internet plus were written into the government working white book. In 2015, the market value exceeded 500 billion US dollars. In 2018, the combination of users from WeChat and WeiXin first time was over 1 billion. In 2019, the new wish of the company became into “Users oriented, technology for good.” Finally, in 2021, the sustainable development division was established (Tencent, 2021).
Now Tencent is a world-leading internet and technology company that develops innovative products and services to improve the quality of life of people around the world. Communication and social network services have been connected more than a billion people all over the world. Furthermore, helping the customers to connect with their friends, families, and business partners. When people go outside, they can use WeChat Pay to access transportation, pay their daily utilities and even entertainment events (MININEWS, 2021).
What are the primary fields of Tencent’s operation?
The company’s main product structure is divided into 6 business groups, each in charge of different businesses; among them, the PCG platform and content business group are also the BGs of Xiaoepinpin to which is the online project practice belongs, and it controls all Tencent user platform content-based traffic products, Is also the BG with the most extensive business scope and volume (Tencent, 2021).
However, where Tencent has been started is the application named QQ. The QQ app was born in 1999, which year the Tencent parent company was established for four years. QQ is very familiars to the Chinese people because over 800 million people registered as QQ’s membership. At that time, people did not get used to using QQ to send messages or chat. Because at that time, people were using telecommunications such as messages and phone calls to communicate with each other. Therefore, when the founder of QQ, Ma Huateng, created these applications, no users adopted them as a daily communication platform. As a result, Ma Huateng must act as a user to chat on QQ (Lei, D, 2021). Sometimes he must act as a female character to chat with male users, aiming to let them believe there are real people to use this app. The historical turning point was in 2001 when Tencent’s QQ cooperates with the Chinese government, and the Chinese government gave the authority of telecommunication, which allows Tencent to be the online service provider to provide the messaging service to users. At that point, Ma Huateng earned his first million RMB.
Moreover, now, Tencent has a detached position in the social field in China. Two giant social attribute apps of QQ and WeChat have been born successively. The social e-commerce product we practised this time—Little Goose Pippin, is also a critical incubation project of PCG. With the help of Tencent’s Monopoly in the social field, the product has unlimited space for reverie.
Has it been successful?
Yes. Tencent is one of the most successful technology companies in China. In 2020, with its 7439 billion dollars, Tencent became the number fourth biggest tech company worldwide. Tencent is thriving in its social communication area and publishes a certain amount of the most popular video games and other high-quality digital content worldwide. It has been enriching the entertainment experiences with interactive activities for people worldwide (Tencent, 2021). Furthermore, Tencent offers a massive range of services. For instance, advertising, FinTech, cloud computing, and any other enterprise services to the digital transformation clients to support the business growth.
How does it make money from its activities, and have any concerns been raised about the company?
Tencent’s income comes from several parts. In the beginning, just like the previous paragraph introduced, the first income was from the government cooperation in telecommunication. In the following, in 2003, the QQ game was born. Mr Ma had a genius idea that he created a kind of visual currency called QQ coin. This kind of visual coin can use legal currency such as RMB to purchase (Tencent, 2021). In the beginning, 1 RMB can purchase 5 QQ coins (Tencent, 2021).
Moreover, with the user’s increase, there are increasing people purchased QQ coins. Moreover, the value of the QQ coin was also increased from 1:5 to 1:4 to 1:2 until 1:1 to the legal currency. The usage way of the QQ coin is that people could use it to purchase different kinds o
f clothes, faces, features to decorate their QQ visual space or their games. Especially for the young people, they prefer to have something different from others. Therefore, they will spend a lot of
money decorating their visual character in cyberspace (Tencent, 2021).
The most valuable project is the visual game. People could use QQ coins to buy whatever equipment, features or authorities online (Lei, D, 2021). There are 88.6 billion dollars of income from the visual game revenue in the last half-year of 2021.
Also, Tencent has the copyright of videos, movies, music. The company provides other platforms like Tencent Video, QQ music, ext., to provide entertainment services to their customers and charges many copyright fees as an income (Tencent, 2021).
However, with Alibaba’s competition, Tencent has invested in many start-up companies in expanding their business map in the current years. Tencent’s investment vision is also very strategic. In e-commerce, travel, video, and localization, it has invested in many “Tencent” products such as JD, Pinduoduo, Station B, Kuaishou, Meituan, Didi, Xiaohongshu, etc.
Some of these companies have already become other big tech companies and keep delivering interest to Tencent (Zhang, M, 2021). For example, JingDong, and JingDong delivery. This is a company that is the biggest e-commerce company except for Alibaba. JingDong is famous for its fast delivery systems and high quality of its electronic products. They were promised that they would never sell fake products to their customers. If their customers have reported fake or harmful products to them, they will punish their product provider very strictly and with a very high fine to the fake provider (MINI NEWS, 2021).
Therefore, Tencent nowadays is not only a single tech company. It is a series of enormous tech company alliances. It connects every aspect of people’s life.
In the conclusion
Tencent is a company that forms from a small technology company and has become a big tech giant. There are a lot of exciting stories about Tencent that you can find on the internet. Furthermore, I believe that in the future, the Tencent company will become better and better.
Tencent, (2021). About, https://www.tencent.com/en-us/about.html#about-con-1
Tencent, (2021) http://mp.weixin.qq.com/s?__biz=MzA3NDEyMDgzMw==&mid=2652966796&idx=1&sn=b44b2134d2341781d3ff5b6777155bec&chksm=84d10462b3a68d7462d01e9028d2b4c0109dec79158f64a2105aa6a4c417dd7a9d67d9274228&mpshare=1&scene=1&srcid=10157LGqXGj6HFIu6iuNjNA7&sharer_sharetime=1634289502592&sharer_shareid=0d69059dd2ec06d26f88d7209bd57f06#rd
Zhang, M. (2021), Tencent QQ, http://www.econ.ucla.edu.
MINNEWS, (2021), Tencent QQ starts to charge, it will take effect from January to August, https://min.news/en/tech/270839027b40e7b85abf127d0cf733bd.html?__cf_chl_jschl_tk__=pmd_XHb9UjW92_7evtB8VGLto7l9cECAfGK70XTuVTCaN2Y-1634466891-0-gqNtZGzNAmWjcnBszQg9
Lei, D, (2021), The financial report of Tencent. https://finance.sina.com.cn/stock/hkstock/hkzmt/2021-08-18/doc-ikqciyzm2221238.shtml