How Tencent Combined Innovation and Homage to Dominate China’s Internet

How Tencent Combined Innovation and Homage to Dominate China’s Internet
By Amazingloong [CC BY-SA 4.0 (], from Wikimedia Commons

“It’s not where you take things from – it’s where you take them to.”

French Filmmaker Jean-Luc Godard

It’s unclear whether Ma Huateng, Founder and CEO of the Chinese internet & gaming giant Tencent is a fan of Godard, but in building his online empire, he certainly took a page from his playbook.

By any measurable standard, Tencent is not just one of China’s biggest internet companies but is listed amongst the industry’s most successful companies around the world. Founded in 1998, Tencent became Asia’s most valuable company in September 2016 when it reached a valuation of $255 billion. That same year the Shenzhen-based company brought in just shy of $152 billion in revenue, making it the fourth largest internet company in the world in terms of revenue generated.

A Reputation for Innovation

In late 2015 Tencent was named as one of Boston Consulting Group’s most innovative companies, rising to number 12 in the world, up from 47 the previous year. Industry experts point to Tencent’s remarkable speed as one of the keys to their innovative capabilities.

“I think user platform and speed are two things that Tencent has been quite spectacular on,” Puneet Manchanda, professor of marketing at the University of Michigan Ross School of Business told “They’ve been moving very fast into many other areas, like media, streaming, advertising, and now apps for taxicab hailing and so on.”

WeChat & QQ

One of the company’s flagship apps, WeChat, is a commonly cited example of how Tencent is dominating the space through rapid innovation. The instant messaging app now has over 900 million monthly active users, thanks in large part to its multi-functionality as Forbes noted in May of this year.

“The crown jewel of the Tencent empire is WeChat, an instant-messaging app with almost one billion users. It has permeated almost every aspect of people’s lives in China, offering users the ability to interact with each other, play games, share videos and buy and pay for almost anything.”

However, critics have suggested that many of the diverse WeChat functions are simply knock-offs of already established apps from the west. The ride-sharing and taxi-hailing functions appear derivative of Uber and the e-wallet functionality has been done many time over before.

Tencent’s other flagship product is the very first one they produced, the messaging app QQ. Like WeChat, QQ was recognized for innovation when it received the World Intellectual Property Organization (WIPO) Creativity Award in November 2010.

“Compared with similar products worldwide, QQ pioneers offline storage of chat records that are readable after remote sign-in the combination of IM software with users’ virtual images chat among multiple users in the same group high file transfer rates and the combination of IM software with the short messaging service (SMS),” according to a Tencent media release.

Here again, it is almost impossible not to note the irony of winning a creativity when the product was originally named QICQ, as it was deemed to be a knock-off of one of the very first instant messaging programs – ICQ. They later shortened the name to QQ.

A Gaming Goliath

After establishing dominance in the internet and messaging industry, Tencent quickly built themselves into one of the world’s biggest gaming companies. Their game Honor of Kings has been the highest selling smartphone game in China’s IOS store this year. And when the purchased Supercell, the Finnish producer of Boom Beach and Clash of Clans, Tencent cemented its status as a gaming apex predator.

In some ways, they may have found themselves victims of their own success this year when the Chinese government criticized them for fueling gaming addiction amongst minors. The company responded by introducing measures which included automatically logging-off younger users after one hour of gameplay per day.

A Lasting Legacy

Is Tencent a truly innovative company or merely a very adept rip-off artist? It would appear both sentiments have a ring of truth to them. Building on what has already been successful is a part of every industry in every part of the world. How many successful companies reach the top by truly inventing the wheel?

The best ones do precisely what Tencent has done – take existing technology to new and exciting places. Sure instant messaging and mobile wallets existed before WeChat. But combining them with other functionalities in a streamlined and user-friendly package was only accomplished by Tencent.