Based mostly in Shenzhen and based in 1998, the Chinese language firm Tencent enjoys big recognition – and income – in China.
Its cute penguin image is as acquainted to Chinese language youngsters because the McDonalds “golden arches” brand is to youngsters within the West, says the BBC’s China media analyst Kerry Allen.
“Tencent is considered a lot greater than only a Chinese language firm in China – it has gained a fame as a family-friendly organisation that connects households, pals and work colleagues in a digital age,” she stated.
“It has a enterprise mannequin that different Chinese language corporations can solely envy – it could attain an viewers of, mainly, everybody.”
However many individuals within the West have by no means heard of it.
That does not imply it is not current in our on a regular basis lives, although – Tencent additionally owns chunks of a few of Western tradition’s hottest video games, music and films.
Like Google’s guardian firm, Alphabet, Tencent has a broad portfolio of pursuits, though arguably it stays finest identified for its messaging companies.
US president Donald Trump singled out the app WeChat in his most recent executive order, which calls for US companies cease doing enterprise with it.
WeChat has over a billion customers, each inside China and around the globe – the Chinese language model known as Weixin.
It’s usually in comparison with WhatsApp – and definitely it’s broadly used for messaging – a number of US messaging apps and social media websites are banned by the Chinese language state so you possibly can’t (formally) Fb message a pal in Beijing, for instance.
However there’s much more to WeChat than messaging.
It is extra akin to a separate working system: similar to you would possibly use Google’s Android or Apple’s iOS for quite a lot of duties, it’s used to learn information, pay payments, order transport or meals, and run small companies.
The agency has not revealed simply how worthwhile WeChat is by itself, however it’s clear that Tencent – as an entire – is prospering.
Incomes outcomes for the primary quarter of 2020 confirmed a complete income of 108 billion Chinese language yuan ($15.2 billion) – a rise of 26% year-on-year, regardless of the coronavirus pandemic. Alphabet’s income for a similar interval was $41.2 bn.
Crunchbase’s Tencent entry lists 479 investments, with a fund totalling $6.6bn. It could be tedious to undergo all of them, however let’s take a fast take a look at a few of them.
It’s clear that Tencent makes some huge cash by way of gaming.
Tencent is the most important video video games writer on the planet. It has a stake within the two hottest Battle Royale-style video games: Fortnite and PlayerUnknown’s Battlegrounds (PubG).
It owns a 40% stake in Fortnite studio, Epic video games, and has the license to PlayerUnknown’s Battlegrounds (PubG) – though it failed in its personal battle to get the sport accepted for distribution in China.
It additionally owns all the League of Legends studio, Riot Video games.
In October 2019, PC Gamer published a list of 16 games firms outdoors of China that Tencent had publicly invested in, together with Ubisoft and Discord.
Music and films
It additionally invests in Western music and movies.
Tencent has lately accomplished a deal giving it a 10% stake in Common Music. The document label consists of main artists akin to Girl Gaga, Taylor Swift, Drake and Kendrick Lamar on its books.
As well as, Tencent already has its personal music division – Tencent Music Leisure (TME).
And a share-swap in 2017 noticed it take a 7.5% stake in streaming large Spotify (Spotify bought 9.5% of TME in return, reported Tech Crunch at the time).
Tencent Photos, its movie and manufacturing arm, has been concerned in numerous Hollywood films, together with Terminator: Darkish Destiny (2019), Marvel Girl (2017) and the upcoming Prime Gun sequel, Prime Gun: Maverick – scheduled for launch in 2021.
Oh – and there is additionally the small matter of the Chinese language large proudly owning 5% of the US electrical automotive agency Tesla.
What’s the US involved about?
President Donald Trump says that the unfold within the US of cell apps developed and owned by Chinese language companies “threaten the nationwide safety, overseas coverage, and economic system of the US”.
The US authorities says each Bytedance’s TikTok and Tencent’s WeChat “seize huge swaths of data from its customers”.
“This information assortment threatens to permit the Chinese language Communist Celebration entry to People’ private and proprietary info,” it claims.
Tencent’s chief govt and co-founder Ma Huateng, often called Pony Ma, is broadly assumed to help the Communist Celebration. He’s a member of the Nationwide Individuals’s Congress (NPC), China’s nationwide parliament.
Trump’s govt order additionally claims each WeChat and TikTok collect information on Chinese language nationals visiting the US, permitting Beijing “to maintain tabs” on them.
Prof Alan Woodward, a cyber safety skilled from Surrey College, factors out that for worldwide customers, WeChat information sits on servers outdoors of China – that means in idea that it’s extra protected against state scrutiny.
Nevertheless, he added that WeChat’s privateness coverage overtly states that it’s going to “adjust to any authorized requests from state companies handy over information they’ve of their servers”.
“Simply as with TikTok, the priority is that the guardian firm is Chinese language and thus it could be argued that they’re certainly topic to the Chinese language Intelligence Act,” he stated.
Tencent has thus far issued the briefest of responses to the information from the US: “We’re reviewing the manager order to get a full understanding,” it stated.