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SWOT Grid of Tencent Essay

Tencent, one of the largest online services portals in China, was founded in November, 1998 by Ma Huateng (Pony Ma), Zhang Zhidong (Tony Zhang) and Xu Chenye (Daniel Xu), and went public on 16 June, 2004 as Tencent Holdings Limited (Tencent, n.d.a). Led by the values including integrity, proactive, collaboration and innovation, the company insists on honesty and respect as its code of conduct, growing rapidly and astonishingly in the past 15 years (Tencent, n.d.b). According to the latest financial announcement, Tencent’s total revenues of the first half of 2014 climbed to roughly GBP3, 807 million (RMB38, 146 million), and the second quarter revenues of 2014 (2Q2014) reached GBP1, 972.5 million (RMB19, 746 million) mainly generated by online games (56% of 2Q2014 revenues) and social network services (24% of 2Q2014 revenues) (Tencent, n.d.c).

Particularly, QQ instant messaging application and Wechat social application were the most widely known products among its diversified income sources. To achieve its mission — ‘to enhance people’s quality of life through Internet services’ (Tencent, n.d.b) and to remain competitiveness towards its main competitor Alibaba, Tencent not only stayed prosperous in messaging services and games, but also expanded to other areas including online security, online research, online payment and even e-commerce, the main territory of Alibaba. In a long term, the company devotes itself to be ‘the most respected Internet Company’, earning respects from consumers, employees, industries as well as society (Tencent, n.d.b).

Leading position in instant messaging in China

Tencent is holding a huge scale of user base in instant messaging, staying in the leading position of the market in China. Referring to the research of iResearch Consulting Group, mobile QQ ranked first as the most popular instant messaging applications supported by mobile Internet in 2013, occupying the largest proportion of 82.6 per cent, followed by its fellow Wechat which accounted for 80.2 per cent, and far beyond the third application Wangxin by over 40 per cent (iResearch Consulting Group, 2014b). When it comes to the frequency of instant massaging usage, mobile QQ still owned the top place by 45.0 per cent, slightly higher than the second one Wechat (40.0 per cent) (iResearch Consulting Group, 2014b). The statistics revealed that Tencent has conquered Chinese mobile instant messaging market through its competitive products mobile QQ and Wechat, and enjoyed an extremely high level of user loyalty.

In terms of user quantity, Tencent stated that in the 2Q2014, the monthly active users (MAU) of QQ (including mobile QQ and QQ used on computers) were 829 million, a decline of 2 per cent in comparison to last quarter but an growth of 1 per cent in contrast to the same period of last year (Tencent, 2014). Meanwhile, 2Q2014 witnessed 11 per cent and 57 per cent increases in MAU of Wechat compared to the last quarter and the same period of last year respectively (Tencent, 2014).

This considerable user base has brought positive impacts on the company. For instance, during the Spring Festival of 2014 in China, Tencent managed to stir up a prevalence of sending messages with a little money among 4.82 million Wechat users (Feng Huang Ke Ji, 2014). By taking advantage of the traditional custom of giving luck money in China and the large user base, the company not only exploited potential users for Wechat but also promoted its payment services Tenpay with ease. Therefore, depending on its massive user base, Tencent has exclusive mobile preeminence which can be converted to extraordinary competitiveness by innovations

Diversified products and services with strong connections

A wide range of Internet demands were covered by Tencent’s products and services portfolio. The offerings of Tencent include social networks (such as QQ, Wechat, Tencent microblog), online games (such as mini casual games, massively multiplayer games and mobile games), contents (such as News and information, music and video) and e-commerce (such as lifestyle e-commerce and online payment). Basing on the diversity of its products and services, the company has met most of the online lifestyle needs and has successfully infiltrated into the daily and working lives of its users. Moreover, between those products and services are strong connections.

Users are able to log in all the supplies of Tencent by the same QQ user account and password without the annoyance of memorizing loads of accounts. After logging into the QQ desktop version, as an example, users can have easy access to other Tencent’s offerings, such as QQ music, QQ Mail, with the same user ID by just clicking the corresponding icons. In this way, user loyalty is more likely to be cultivated and maintained. Accordingly, Tencent will remain to be a giant in the Internet industry by supplying multiple and practical choices to utilizers and in the meanwhile, sharing the user base among its products and services to create further value.

Conference list

Enfodesk. (2014a) Enfodesk: Alipay and Tenpay still led in online payment market in2013. [Online] Available from: http://www.enfodesk.com/SMinisite/newinfo/articledetail-id-396670.html [Accessed 14 September 2014].

Enfodesk. (2014b) The monitoring report of China’s mobile games operation platforms of the second quarter of 2014. [Online] Available from: http://www.enfodesk.com_SMinisite_newinfo_reportdetail-id-412860.html [Accessed 13 September 2014].

Enfodesk. (2014c) The special report of the data of China’s e-business of the second quarter of 2014. [Online] Available from: http://www.enfodesk.com_SMinisite_newinfo_meetingdetail-id-194.html [Accessed 13 September 2014].

Feng Huang Ke Ji. (2014) Tencent: there were 4.82 million users participating in snatching red packets through Wechat on Chinese New Year’s Eve. [Online] Available from: http://tech.ifeng.com/bat3m/detail_2014_01/31/33511573_0.shtml [Accessed 13 September 2014].

iResearch Consulting Group. (2014a) Alibaba dominates mobile commerce in China, with 76% of all sales and 136M MAUs. [Online] Available from: http://www.iresearchchina.com/news/5635.html [Accessed 13 September 2014].

iResearch Consulting Group. (2014b) The research report of users of mobile instant messaging application in China. [Online] Available from: http://report.iresearch.cn/2180.html [Accessed 13 September 2014].

Tencent. (n.d.a) About Tencent. [Online] Available from: http://www.tencent.com/en-us/at/abouttencent.shtml [Accessed 11 September 2014].

Tencent. (n.d.b) Corporate culture. [Online] Available from: http://www.tencent.com/en-us/cc/culture.shtml [Accessed 11 September 2014].

Tencent. (n.d.c) Fact sheet. [Online] Available from: http://www.tencent.com/en-us/content/ir/fs/attachments/investorintro.pdf [Accessed 11 September 2014].

Tencent. (2014) Tencent announces 2014 second quarter and interim results. [Online] Available from: http://www.tencent.com/en-us/content/at/2014/attachments/20140813.pdf [Accessed 12 September 2014]

Tencent Technology. (2014) Wang Bo from Tencent: the number of registered users of mobile games platform increased by seven times in a year. [Online] Available from: http://tech.qq.com/a/20140802/013963.htm [Accessed 14 September 2014].

The Tencent MIND. (2014) Tencent builds up an mobile life circle among hundreds of millions net citizens by its marketing value ‘Yi Chu Da Yi Gong Ming’. [Online] Available from: http://www.tencentmind.com/news/news1491.html [Accessed 14 September 2014].

Yilun Chen. (2014) Tencent aims to undercut Alibaba with billion chat users. [Online] Available from: http://www.bloomberg.com/news/2014-08-12/tencent-aims-to-undercut-alibaba-with-billion-chat-users.html [Accessed 13 September 2014].

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