Tencent Searches for “Buried Treasure” in Online-Offline Integration

TANG SHIHUA

(Yicai Global) Jan. 25 — Chinese internet leviathan Tencent Holdings Ltd. aims to bridge the gap between online and offline experiences for users, with its newly introduced mini-apps on vastly popular lifestyle app WeChat playing a key role, says the company’s vice-president.

Shenzhen-based Tencent sees the combination of online and offline presences as a key trend for the foreseeable future, with the latter sector representing “buried treasure,” for the company, said vice-president Liu Zhiping at the annual Tencent investment conference yesterday.

China has recently witnessed a wave of initiatives among its tech conglomerates to expand into the physical world. Tencent recently agreed a deal with French supermarket chain Carrefour SA’s China unit to work together on smart retail and mobile payments, while rival Alibaba Group Holding Ltd. announced plans in November to invest HKD22.4 billion (USD2.9 billion) in hypermarket operator Sun Art Retail Group Ltd.

“WeChat mini-apps serve as very good platforms to unleash the power of users on the social media network,” he said.

WeChat can access many mini-apps by scanning a QR code or performing a search on the platform, without any need for downloads or installation. They serve a range of functions from ordering a taxi to buying train tickets.

Tencent is also looking to create new business opportunities through its prolific investments in tech startups in recent years. “Tencent has invested in more than 600 enterprises over the past several years, and their combined value has now exceeded Tencent’s capitalization,” Liu added.

The Shenzhen-based conglomerate’s market cap of the Shenzhen-based conglomerate has topped HKD4.46 trillion (USD564 billion), while founder Pony Ma currently ranks as the 11th richest man in the world with a personal wealth of USD52.1 billion.

Notable Tencent-backed start-ups include bike-sharing giant Mobike Technology Co., electric carmaker Byton Technology Co. and eye clinic operator C-Mer Eye Care Holdings, which has plans to go public.

When asked about the differences between Tencent and traditional strategic investors, Liu stated that Tencent’s investment philosophy is centered on target companies, rather than itself, and the firm prioritizes people and ideas when it invests.

Tencent is willing to foster a close and healthy relationship with any company, as long as it can help it grow and there is scope for business cooperation, regardless of the development stage and industry of the firm, Tencent’s investments partner Li Zhaohui once said.

Tencent gives priority to consumer internet-related businesses when investing, such as content producers, new retail, as well as high-tech and enterprise services.