300 million and clicking - Tencent's web chat service a hit

Tencent's mobile instant-message app records rapid user growth in two years since launch

PUBLISHED : Friday, 18 January, 2013, 12:00am
UPDATED : Friday, 18 January, 2013, 5:27am

Launched just two years ago, mobile instant-message application WeChat, developed by mainland internet giant Tencent, now has 300 million registered users, according to the company.

Ahead of its second anniversary on Monday, WeChat says its user base has far outpaced its competitors on the mainland.

"I think the fast growth in WeChat will be maintained this year - there is still huge potential for it if you look at the data of China's internet industry," said Huang Meng, an analyst at market research firm Analysys International.

The mainland had 564 million internet users at the end of last year, up 10 per cent from 2011, China Internet Network Information Centre said in its latest report on the development of country's internet industry.

"That means WeChat covers only a bit more than half of the internet users, not to mention an even smaller coverage of the mobile-phone users," Huang said.

There were more than 1.1 billion mobile-phone users on the mainland at the end of November, according to official statistics.

According to the internet network information centre, 420 million mobile subscribers access the internet through their phones.

Other social messaging services include mi and momo but their scale is much smaller than WeChat.

"There is no comparison," said Liu Xingliang, the chairman of Hongmai Software, an internet data analysis firm in Beijing.

Liu said he expected WeChat user number to reach 400 billion "quite soon" - "before the end of this year".

However, even with such a huge user pool, Tencent was still looking for a suitable business model to make profit from WeChat, he said. "So far, I fail to see a clear model."

A research note by Jefferies said mobile games could be a source of possible monetisation for WeChat. It set a target price of HK$330 for Tencent.

The stock closed up 0.07 per cent at HK$267.40 yesterday, compared with a 0.07 per cent fall in the Hang Seng Index.

Huang said he was optimistic about WeChat's ability to monetise its operation. "Actually there are a lot of directions WeChat can try, including gaming, e-commerce, or charging on communication services," he said.