Tencent to invest more in boosting online-to-offline partnerships
Chinese internet titan Tencent Holdings plans to step up investments in strategic online-to-offline (O2O) partnerships to compete with aggressive rivals Alibaba Group and Baidu, following solid earnings growth in the quarter ended June 30.
"We look forward to continuing to deepen our relationship with strategic partners in various [industry[ verticals, and to develop new services that bring the best experiences to our users," Tencent chairman and chief executive Pony Ma Huateng said on Wednesday.
In a company filing with the Hong Kong stock exchange, Ma said it was a priority to cultivate a vibrant mobile ecosystem that will "bring our own and our partners' products and services to consumers in China".
Tencent last month increased its stake in Maimaibao, a mobile e-commerce provider serving China's rural areas. It also teamed up with Chinese property developer Evergrande Group to create an O2O platform for ordering, logistics and distribution.
Earlier this month, Tencent proposed to buy the shares of mobile and online travel services provider eLong that it still did not own and take the Nasdaq-listed firm private.
"We believe these initiatives will help increase adoption of [Tencent's] WeChat payment," Tsang Chi, the head of Asia internet research at HSBC, said in a report.
Shenzhen-based Tencent, Asia's second-largest internet company after Alibaba, posted a 25 per cent increase in net profit to 7.3 billion yuan last quarter, up from 5.8 billion yuan in the same period last year. That gain was attributed to steady growth in its social and media platforms, mobile and online gaming businesses, and online advertising.
Total revenue rose 19 per cent to 23.4 billion yuan from 19.7 billion yuan a year ago. Online advertising revenue jumped 97 per cent to 4.1 billion yuan, while smartphone games turnover grew 11 per cent to 4.5 billion yuan.
Monthly active users on mobile app WeChat - Tencent's growing platform for payment, social media, advertising and games - were up 37 per cent to 600 million at the end of June.