Tencent
QQ Wechat
Presentation
Eva Lau
Florence Sit
Content
E-business in the world
 E-business in China
 Tencent QQ and Wechat:
 Company Overview
and key business figures
 Situation Analysis
 competitors’ analysis
 E-business strategies
 Communications

E-business in the
world
E-business in the world
 E-business
(electronic business):
 buying and selling of products or
services is conducted over electronic
systems such as the Internet and
other computer networks
with a click of the mouse, a
transaction can be completed
E-business in the world
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Business-to-consumer (B2C) :
customers gathering information
purchasing physical goods (i.e.such as books
or consumer products)
information goods (or goods of electronic
material or digitized content, such as
software, or e-books)
second largest and the earliest form of ecommerce
E-business in the world

Interactive Media in Retail Group (IMRG), a U.K. online retail
trade organization:
Over 1 trillion euro ($1.25 trillion) by 2013
 the total number of Internet users will
increase to approximately 3.5 billion from
around 2.2 billion at the end of 2011

E-business in the world
business-to-consumer e-commerce sales
in 2011 increased to 690 billion euros
($961 billion)
 an increase of close to 20% from 2010

E-business in the world
Leading countries:
E-business
in
the
world
Leading countries:
E-business
in
the
world
Leading Companies (E-business only, excluding traditional retailing):
E-business in China
E-business in China
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the world’s 2nd largest online market
150 million users
amounts to RMB406 billion in 2012, with
current value growth of over 80%
continue its booming trend
driven by competitive prices, the convenient
shopping process and wide product ranges
E-business in China
Apparel internet retailing sees the
strongest current value growth of 128% in
2012
 Taobao.com dominates the internet
retailing category, with over half of total
value sales in 2012
 The forecast value CAGR is expected to
remain robust, at over 29% between 2012
and 2017

E-business in China
E-business in China
E-business in China
E-business in China
Overall,
 1. Alibaba Group (Taobao, Tmall)
 2. 360buy.com (now changed its name to
Jingdong JD.com)
 3. Suning.com
 4. Tencent QQ
 5. Amazon.com, Inc.

Company Overview
Company Overview
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Tencent Holdings Limited
Founded in November, 1998 by a young Chinese entrepreneur ‘Ma
Huang Teng （馬化騰)’
Listed on Hong Kong Stock Exchange in 2004
Internet and media industry leader in China
Business to Consumer (B to C) e-commerce operation
Leading Internet platforms in China are : QQ (QQ Instant
Messenger), WeChat, QQ.com, QQ Games, Qzone, 3g.QQ.com,
SoSo, PaiPai and Tenpay
Company Overview

Popular instant messaging software
services – QQ
grown into China's largest and most
used Internet service portal

Mobile chat service - Wechat
bolstered the continued expansion of
Tencent in smartphone services and
targeted at users in international
market
Company Overview
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Corporate culture
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Vision: To be the most respected Internet company
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Mission: To enhance people's quality of life through Internet services
Key business figures
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Tencent announced Q3 2013 results on Nov13 2013
Gross profit increased 2.6% over the last quarter
Revenue increased 36.6% over the same period last year
Significant increase
Key business figures
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Performance over the past few years
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Average profit margin growth during 2008 and 2012 is 38.58%
Steady and optimistic growth for investors
Revenue earned recorded high from year and year
Number of employees increased by 17966 employees from 2008
Continued surge in revenue is expected with the more rapid
expansion of e-business and online advertisement
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E-business contributed to the rise in
revenue significantly
In 2009, Tencent advertising
revenue reached RMB 962.2million,
17.5 times more than that of 2004
Marketing strategies
4P – Product
• Mass media
• Entertainment
• Internet and
mobile phone
value-added
service
• Online
advertising
services
4P – Price
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Core products such as QQ and Wechat are
free
Expanded products such as fancy weapons,
costumes for their avatars and online VIP
rooms
charge
4P - Place
Users not only get the software installation
package from Tencent’s homepage, but
also by major software platform
 easy to get
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4P - Promotion
TV advertising: commercials and
sponsoring TV shows
 Online advertising: videos and search
engine
 CSR: charity events

QQ
&
Wechat
Situation Analysis
Situation Analysis – QQ
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Tencent QQ released in Feb 1998 – China’s most
popular instant message (IM) services
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By Q3 in 2013
active QQ users amounted to 815.6 million monthly
while its peak concurrent users reached 178.2
million
Internal analysis – QQ
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Due to the trademark infringement with ICQ which is the first
developed IM by an Israeli company, name changed from OICQ to
QQ
Clarify the disputes caused by copyright and settled down the law
issues related to the property right and registration of domain name
in 2003  Facilitate better future expansion of QQ
Internal analysis – QQ
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Types of QQ (IM)
 QQ
Basic functions of text messaging, voice chat, video call and
online (offline) file transmission
 QQ Enterprise
Connects business entities with the QQ user database
 Tencent Messenger
Designed for office environment
Upgrades
 Continued upgrade itself since 1999
 Latest version – QQ 2013 released on 2013-11-23 for Windows’ users
– QQ for Mac released on 2013-10-29 for IOS users
Internal analysis – QQ
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Compatibility
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Support cross-platforms
 Compatible to a large amount of operating systems:
Android, IOS, Linux, OS X, Windows, Windows Phone, Windows
mobile/CE, Symbian, Java ME, Web App
 Highly increase flexibility for users
External analysis – QQ
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In China market, main competitors in instant messaging field:
Fetion, Liao.189.cn, Mobile Wangwang, Renren
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But still, QQ dominated the market by cumulative account number
38.07% of market share in China
External analysis – QQ
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In global market – instant messaging field, main
competitors:
Windows Live Messaging (MSN), Facebook, Skype, Google
plus
Although QQ enjoys 815.6 million users, QQ users
are mainly confined to China market
Europe market and American market of IM
are still led by MSN, Skype
Situation analysis - Wechat
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Wechat (Chinese pinyin: Weixin)
fast growing instant messaging platform of
smart devices
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By Q3 in 2013
active Wechat users amounted to 271.9
million monthly with 100 million users
registered outside China
Internal analysis - Wechat
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Firstly released in February 2011 named
‘ Weixin ’
Featured by voice chatting – Convenience
 Grab market share of IM in smartphones in China
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Re-branded as ‘ Wechat ’ in April 2012
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Get into international market of Instant Messaging
 Enhance the awareness of Tencent limited
worldwide
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Create online business opportunities through
multiple functions
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Enables promotion delivered from business to
consumers
External analysis - Wechat
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Contrast with QQ,
Competitors of Wechat are more international
Whatsapps, Facebook, Skype, Line, MSN
Viber
Competitor analysis
Social networking apps in smartphones
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Whatsapps took a lead in Brazil, south Africa and Indonesia in terms of
market share
Though Wechat only led in China, it occupied most of the market share in
local market
Whatsapps
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WhatsApp Messenger
Cross-platform IM for smartphones
Released in 2009 by American company ( Whatsapps. Inc )
Targeted customers: Worldwide
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More than 90% reach in Latin American countries
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Over 190 million monthly active users
Share 400 million photos each day
Handle 10 billion messages per day
Simple and clear template
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Multi-functions
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Last seen shown
2 ticks representing successful sending
User-friendly – No advertisement
Whatsapps vs Wechat
Monthly Active users comparison
Wechat
Whatsapps
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Monthly Active user of whatsapps increased – 20 billion
within a half year
Monthly Active user of wechat increased – 8 billion
within a half year
Both enjoy foreseeable growth
Line
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Japanese Proprietary application
IM on smartphones and PCs
Launched in 2011 by Japanese company
Reached 100 million download in Jan 2013
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Hit 300 million in Nov 2013
Targeted at:
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Asian countries
 Establish office in USA for expansion
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Featured by:
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Adorable stickers – charged sticker stores
Line games
Show the status of ‘Read’ the message
Funny and cute interface
Promotion of Line vs Wechat
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Line: Asian countries – Invite pop stars to film TV advertisements
 Captured attention from teenagers
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Siwon – Korea ; Katrina Kaif – India
Wechat: Asian countries – QR code of shops
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Promote itself through QR code functions
through others (e.g Starbucks)
Win-win situation
Celebrities effects
Fetion
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Fetion (Chinese Pinyin: Feixin)
Literally means ‘flying letters’
Developed by China Mobile telecom in 2007
Cross-platform IM for smartphones and PCs
Targeted: China Mobile telecom users
( Mainly join the local competition in China )
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Charge 5CNY per month for VIP users
Followed by QQ and Wechat as
the third large IM in China
occupying 18.37%
Facebook
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Social networking website
Founded in 2004
Used worldwide
Its Facebook Messager competed
with IM in the market
Top social communication tools in
USA BUT
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Due to restrictions on Internet usage
 FB is banned in China
 Barrier to enter China market to
compete with QQ or Wechat
MSN
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The MicroSoft Network
Debuted as Online services provider in 1995
Entered China Market as IM provider in 2005
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Recorded 25% increase in number of customer used
just within 4 months
 Reached more than 60% in market share at peak in 2008
 Favorite communication tool for white-collar in China
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Fade out in China due to the lost to QQ
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Left only 45 million users in China while QQ already
enjoyed 600 million users in 2012
 Only occupied 2.38% of market share in China in 2013
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Microsoft took over Skype in China
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Shift the users of MSN to Skype
Tencent –
E-commerce
Tencent – E-commerce
a key component in its "Online Life"
strategy
 Paipai.com
 Tenpay
 Accounts only
little proportion of
its revenue
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Tencent – E-commerce
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Paipai.com
Tencent's online trading platform
consists of a number of major channels, including
women, men, online games, digital products……
Strategies:
Online Life
personalized customization
fashionable and trendy brand culture
takes full advantage of Tencent's QQ and other
services
Tencent – E-commerce
Tenpay
 online payment system similar to PayPal
 Strategies:
 Online Life
 personalized account applications
 individuals can use TenPay for utility
payments and to refill their public transport
cards
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Communications
Communications
Two-way interaction between it and
consumers
 Deliver value to customers
 1. Experiential Marketing
 2. Network Marketing
 3. Event Marketing
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Communications
1. Experiential Marketing
 Free product trial such as QQ android and
QQ mail
 Collect customers' feelings and
suggestions
 Do product revisions
Company brand promotion
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Communications
2. Network Marketing
 Depends on consumers’ initiative and
participation
 Those who carry and transmit information
 E-card: logo on it
Consumers engaged in promotion the
company
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Communications
3. Event Marketing
 Establish a corporate socially responsible
brand image, enhance reputation, thus
achieving consumer recognition, etc.
 2007 Tencent Charity Found was
established
 2010 Shanghai World expo
 Consumers extended acceptance and
satisfaction towards Tencent
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SWOT analysis
SWOT analysis
Strengths
•Large number of users
•Huge customers base
Weakness
•Copycat image
•Most products are popular in
China only
•Compelling advertisement
Opportunities:
Threats:
•Number of internet users in China •Fast changing online environment
continues to rise
•Rely on huge investment
•Development of smartphone
Conclusion
Tencent is ranked the forth in China’s ecommerce market
 With the gradual fading out of QQ, Wechat
outperformed in China and starts to
engage in international market
 The coming years are critical for entering
international IM market
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