On Monday Tencent’s shares raced up another 10%, hitting a record high of HK$766.5 in Hong Kong. The rise pushed Tencent’s market capitalisation close to $949 billion, which is knocking on the door of the $1 trillion club inhabitated by Saudi Aramco, Apple, Alphabet, Amazon and Microsoft.
The surge in the shares has made Zhang Xiaolong, the man credited with creating WeChat, into the fourth richest ‘white-collar worker’ in China (a little behind his boss Martin Lau, president of Tencent).
Zhang is believed to have amassed a fortune of Rmb14 billion ($2.16 billion) during his tenure at the Shenzhen-based internet giant.
WeChat, which has just celebrated its 10th anniversary, has cemented its reputation as China’s dominant social media app. It boasts over 1.1 billion daily users, 780 million of whom use Moments, a social media function similar to Facebook’s Timeline. A study from China Internet Watch has suggested that users spend an average of 77 minutes a day on the app too.
“In the past 10 years, WeChat has grown from a simple mobile messaging software to a national super app. Whether it is the sending of ‘red envelopes’ during the Chinese New Year or the way we make payments electronically, WeChat has become the foundation of China’s internet,” Luming Financial commented.
Zhang took the opportunity of the app’s 10th anniversary to highlight how WeChat is constantly evolving. In a minor example, its emojis have just received a makeover. When a customer chooses one from the WeChat selection, the images now animate on sending. The ‘bomb’ emoji detonates in an animated explosion, while the ‘puke’ emoji vomits into the conversation. Zhang was more excited, however, about the prospects for in-app video on WeChat. “Video expression will be a major theme for the next 10 years of content generation,” he predicted.
Tencent has lost ground to ByteDance’s Douyin in short-video – brief clips of user-generated content – but it is betting that it will reel in the competition by encouraging its users to generate video content for livestreaming on WeChat.
“Livestreaming has been in development for many years, but most people still view it from the perspective of e-commerce,” Zhang told the audience at the 10th anniversary event. “In the future, livestreaming will be about how people express themselves.”
Tencent has laid the foundations for a new era of livestreaming with the launch of WeChat Channels. Since last July a select group of content creators and influencers have been able to access the new channels in beta mode to create short-videos and livestreams. Tencent has also added a similar livestreaming function to its mini programs service (another kind of app, mostly created by external companies, that run within the WeChat ecosystem).
“In Zhang Xiaolong’s view, livestreaming is much easier to produce compared with short-videos, because short-videos require copywriting and editing. Livestreaming, on the other hand, is more casual, just like chatting with friends,” reckoned Phoenix News, a news site.
WeChat is planning to promote its livestreaming platform more aggressively during next month’s Chinese New Year, when many people won’t be meeting up with their extended families as per usual because of the pandemic. Zhang says that the app can help with more ‘digital’ family reunions over the traditional holiday season. “WeChat hopes that livestreaming will become a new way of greeting during the Chinese New Year… so that people can be reunited, according to tradition,” Phoenix News pointed out.
The stage is set for a seismic clash with ByteDance, which is planning a huge marketing splash for Douyin, its short-video app, over the holiday period (Douyin is the Chinese ‘sister’ app of TikTok). Earlier this month Douyin announced that it would be the sole sponsor of the digital ‘red packet’ event promoted by Chinese state broadcaster CCTV during this year’s Spring Festival Gala (Kuaishou did it last year, see WiC481).
Traditionally, high-profile deals like these have helped sponsors to drum up new business for their digital payments services. Sure enough, Douyin is launching an in-app payment tool of its own to coincide with the pricey sponsorship. It says it will be pouring Rmb2 billion into the red packet giveways in a bid to win over new customers.
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