Tencent's 'WeChat' instant-message app will challenge Sina
Mobile instant-message application user base may double to 400m in three years, analysts say
Just two years ago next month, Tencent Holdings introduced a mobile instant-message application called WeChat. It already has 200 million users, including Lai Jingkui, a teacher in Zhuhai in the south, who uses the "Drift Bottle" function to find friends.
While Lai, 23, is still looking, Tencent has found a hit.
WeChat's user base could double to 400 million within three years, providing the chance for China's biggest internet company to boost revenue by adding mobile e-commerce and location-based advertising, Core Pacific-Yamaichi International (HK) estimates.
That is welcome news for Shenzhen-based Tencent, which this year faces its second-slowest annual profit growth since it listed on the Hong Kong stock exchange in 2004. The problem: a shift in internet usage from personal computers to smartphones and tablets.
The trend is pulling users away from Tencent's offerings toward competitors like Sina's Twitter-like microblog service, Weibo, which built a user base of 424 million as of September.
Sina is projected by analysts to turn from a loss to a profit in 2012, and net income growth next year is estimated to be more than double Tencent's.
Tencent is counting on WeChat to close the gap.