Tencent needs to see market gap before expanding further overseas, says executive
Tencent signed a trade deal with Britain in May to develop creative partnerships with organisations such as the BBC
Chinese internet giant Tencent will only take its social networking platforms, music and gaming services to an international audience if it believes there is a gap in the market it can fill, a senior executive told Reuters on Thursday.
Tencent runs China’s biggest social network, music and gaming systems, with its billion user-strong WeChat messaging app sitting at the heart of the country’s booming internet economy.
But the company remains largely unknown to Westerners outside technology or financial circles. Speculation has grown that Tencent would expand internationally, following a string of investments and English language content partnerships abroad.
Tencent Senior Executive Vice President Seng Yee Lau said the company had to ask itself if they could create a user base in different countries.
“People ask, when are we bringing WeChat to different countries,” he told Reuters. “Our answer has always been, for any digital services or products, … if they have a better way of meeting the needs of the local customers, then they have a basis to be in there.
“If they haven’t figured out a way to be a better alternative then we have no basis of being there.”
He added that there was further growth available in China.
Tencent signed a trade deal with Britain in May to develop creative partnerships with organisations such as the BBC, British Fashion Council and Visit Britain, the country’s tourist promotion board.
In recent years it has ploughed billions of dollars into scores of international investments in e-commerce, payments and gaming firms, with its biggest move in Europe an US$8.6 billion deal in 2016 to take control of Finnish mobile games site Supercell.
Asked where Tencent would want to invest next, Lau said the company wanted to partner with start-ups that would fit with its culture and offer something to its Chinese audience.
“Everybody around the world is looking at us to be a gateway into China, we are the infrastructure, so there are more people looking at opportunities to come to China with us than us going out,” he said, adding that high tech or artificial intelligence were areas of focus.
Lau was speaking at the annual Cannes Lions advertising conference in the south of France, where he met with the marketing officers of some of the world’s biggest advertising spenders to discuss how they should navigate the digital forces convulsing the industry.
The Chinese advertising industry differs from many others in that it has enjoyed a strong 16 per cent annual growth for the last 6 years, and around 60 per cent of ad spend goes online.
Lau, a senior executive at Tencent Advertising, said his message was that younger people had created a new “digital civilisation” and that merely moving more advertising budget from TV to mobile phones was no longer good enough.
“Look at how they live their lives,” he said.