Outside of China, the momentum of its major digital players has been significant as the likes of Tencent, Alibaba and Baidu ramp-up awareness globally. As it becomes more global, so too does its influence in showing the global technology world how to build an ecosystem within the mobile phone.
Just this week Tencent posted a 59% growth in revenue and a 70% profit growth, driven largely by advertising and gaming revenues. The results don’t split out what proportion of revenue is domestic, versus international, but the company did say that future revenue would be driven by tech innovation, something that has become a driver of its international awareness.
For Tencent, its messaging app WeChat is the front runner of this global awareness but, as Steven Chang, corporate vice president of Tencent told The Drum, China is moving out and as a result its wider business can ride that wave even further.
Chang explained that Wechat is now a global app, despite the fact that growth came organically as the company has never marketed or pushed use of the app outside of China. He said that of the 900m users of the app, 100m are outside China. “It’s not small at all, that’s a very international development and we’ve not really pushed it yet; that’s pretty much organic.”
He said part of this organic growth is because China is moving out, both in terms of its population and the increase of non-domestic tourism, and the increasingly outward view from Chinese businesses.
“China is now going out and it’s not just the tourists, it’s also students etc and that’s why they brought along WeChat. We have a lot of international friends, visitors, clients and marketers and we encourage them to use WeChat. Once you download it, you have ways to communicate with Chinese friends and colleagues, then you spread to friends when you get home and you say ‘oh this is better than whatsapp’. It grew that way,” he explained.
The second phase of this Chinese influence on technology across the world is in how services interact across social platforms. According to Chang, China has become the leader in this due to the scale that it can create once something has crossed into mainstream use.
“The national buzzword is the ‘sharing economy’ with the success of Ofo bikes etc. This year it is the real digital economy and we see it getting bigger and bigger. The concept itself is not unique but the scale is. Once in something is in China and has a spark, it turns into a big scalable factor and new digital business models can emerge. Given that we are a tech company with a digital platform, our DNA from the start is social; everything is born together and without each part it can’t be such a huge phenomenon,” said Chang.
Proving validity of the services that now sit on top of the social platforms in China creates confidence that the behaviours will live outside the country. A good example in how Tencent are pushing this is in mobile payments.
“First of all it grows organically but because of the growth of WeChat, we have another function that’s growing which is WeChat Payments,” he explained.
Chang said that often the introduction to the system is around Chinese New Year, when Chinese people send hongbao to one another digitally as gifts.
“It’s because of that O2O payment system,” he explained, “We have then, earlier this year, extend the service into seven different markets and not just in China now. It all depends on individual market negotiations to set up but it works because it becomes very convenient for a Chinese tourist going to new countries. It takes time, but even in different markets it is something that becomes a natural behaviour.”
According to Chang, marketers are welcoming of WeChat’s global growth as it provides an alternative to Western platforms, such as Facebook. However, he said that while organic growth is getting Tencent into new markets, it’s not ready to take on Facebook quite yet.
“I get a lot of requests from global marketers who are asking ‘when can you become another Facebook globally? We want to sign another global deal’, so I say ‘hang on, hang on’ it’s only five years old and we’re pretty much focused in China,” he said.
Within China the service is accelerating at speed, with users in some cities that are adopting smart city technology allowing citizens to use WeChat to book doctor’s appointments. From Chang’s point of view, there’s still much to do in China and still plenty of room for growth domestically, but it doesn’t mean it’s not happy that it’s influencing the global market.
By Charlotte McEleny