Tencent restructures with eye on industrial internet as gaming business slows
A recent string of investments, including in smart retail, is expected to help drive Tencent’s shift to more enterprise solutions
Tencent Holdings, which derives two-thirds of its revenue from online gaming and social media, reshuffled its business units this week in a bid to focus more on the industrial internet, as China seeks to upgrade its manufacturing amid a trade war with the world’s biggest economy.
The restructuring, the first in six years for the Shenzhen-based company, will see the creation of a new business group devoted to cloud and smart industries. Another new group will combine its social media, mobile internet and online media operations, a nod to the need for more strategic coordination with the emergence of competitors like ByteDance, whose artificial intelligence-driven recommendation algorithms for news and short videos have captured market share and eyeballs away from Tencent’s own video and news platforms.
Tencent will also form a new technology committee that will create an internal platform for the sharing and collaboration of fundamental technologies within the company and apply them to different industries.
The restructuring marks a “significant strategic upgrade” for the company, which had connected users with consumer services in the past, Tencent chairman and chief executive Pony Ma Huateng said in a statement on Sunday. Given that “the next era of the internet is the industrial internet”, Tencent will connect “industries and consumers to build a more open ecosystem”, he said.
With the reshuffling, Tencent will have six business groups, down from seven previously. Four existing business groups – corporate development, interactive entertainment, technology and engineering, and WeChat – remain unchanged.
