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Gossiping about the future on the Internet

Updated: 2012-12-03 09:57
By Chen Limin ( China Daily)

After becoming China's biggest Internet company with a popular chatting tool, Tencent Holdings Ltd is attempting to copy its success both in and outside China with another hit service, WeChat.

The Shenzhen-based company remains cautious in public about its strategy of developing WeChat, a mobile application that enables users to send text messages, voice messages and photos free of charge. However, it isn't hiding its ambition to use the service to help it take a share of the global Internet market.

Gossiping about the future on the Internet

Norman Tam, head of the Hong Kong Offi ce at Tencent, speaking during a WeChat promotion event in Taiwan. The Shenzhen-based company plans to promote the new chatting tool in the Asian market, including Hong Kong and Taiwan, to make the service, which is already popular on the Chinese mainland, more widely known. [Photo/Provided to China Daily]

It has been spending a sum of money on marketing WeChat in Asian markets, such as Hong Kong and Taiwan, to make the service, which is already popular on the Chinese mainland, more widely known.

"We mainly choose emerging markets and Asian markets culturally and geographically close to China," Tencent said in an e-mail reply to China Daily when commenting on its strategy for overseas expansion.

WeChat, which went online first on the Chinese mainland in January 2011, has been climbing in the ranks of mobile applications.

On Nov 25, it was the most popular social networking application on Apple Inc's iOS in six economies measured by downloads: Taiwan, Hong Kong, Vietnam, Argentina, Thailand and Brunei, according to App Annie, a data tracker of mobile applications. There were altogether 43 markets where WeChat ranked in the top 10 on the list of iOS application downloads.

Marshall Nu, App Annie's chief financial officer, said to secure the same ranking for a number of months means that downloads of the applications have been in fact growing linearly when taking WeChat's Singapore ranking, around the second since July, as an example.

However, compared with the United States counterpart WhatsApp, a fast-growing messaging service, WeChat has a long way to go.

On Nov 25, WhatsApp ranked top 10 among all social networking applications running on iOS in 456 countries around the world, App Annie data showed.

However, analysts seem to be positive about WeChat's increasing footprint in the global market.

"With WeChat, we see a product that I think is far superior to WhatsApp. It is designed for the mobile phone, so it is more attractive than weibo (a Chinese Twitter-like micro-blogging service) or Facebook clones. It also looks and feels 'international' (in English) - there's really no way of knowing that it is a 'made in China' app," said Duncan Clark, chairman of BDA China, a consultancy company that follows the IT industry.

Tencent was not the first one to provide WeChat-like messaging services, but it managed to make the service the most popular of its kind in China with its large user base and features.

Jim Lai, general manager of Tencent's online payment arm, Tenpay, said in November that the company would add payment services to WeChat within two months. Users will then be able to scan codes at stores and make purchases with WeChat, he said.

This is a potential way Tencent can generate revenues from WeChat: through purchases using the service and even advertisements from retailers, said analysts.

Earlier this year, Tencent paid 403 million yuan ($64.7 million) for 13.84 percent of WeChat's Korean counterpart, Kakao Talk, which said it had broken even in September through advertisements, mobile payments and providing games, said a report by industry website

Pony Ma, Tencent's chairman and chief executive officer, said in November that entertainment, advertising and transactions were the areas the company "would actually sort of put some trails on" for WeChat.

However, the company will be focusing on building its user base rather than generating revenues from WeChat, he added.

Clark, from BDA China, said one of the challenges for the big Internet players such as Tencent to expand in the global market is that "it will take a long time for international revenues to make a dent in their overall revenues - the China market is so big".

Tencent managed to become China's biggest Internet company with a market capitalization of about $60 billion by making money from online games, social networking and other business with a huge user base for its QQ chatting service.

QQ had a total of 784 million active accounts in the third quarter, making it the most widely used software in China. China had 538 million Internet users by the end of June.