Tencent seeks new growth in year of transition as consumer businesses mature
- Tencent capped its roller-coaster year with a quarterly profit that missed analysts’ estimates
- The internet giant boosted spending on cloud and mobile payments to offset gaming slowdown
Depending on whom you talk to, 2018 was either a bumper year for Tencent Holdings or a year to forget.
The first Asian company to breach US$500 billion in market cap, the internet giant’s shares rose to an all-time high in January 2018, powered by its money-minting video games business and ubiquitous WeChat super app. Then came a much-chronicled government crackdown on content and gaming, which abruptly ended the party and wiped out almost half the company’s value by October.
Tencent’s roller-coaster year also took place as China’s technology giants came of age. Baidu, Alibaba Group Holding and Tencent – the trio of internet companies that has come to represent Chinese Big Tech – are all around 20 years old and have expanded their presence beyond China's shores.
“We’re coming to the tail end of a decade of gangbuster high growth due to the mobile revolution,” said Matthew Brennan, managing director of consultancy China Channel. “The incremental increases in number of users and time spent online per person is getting less and less. All the low-hanging fruit is long gone.”
He said the business-to-business market “is an area many technology companies, both in the US and China, feel holds more opportunities for growth”.