What is Tencent?

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The penguins are symbols of Tencent’s iconic messaging platform QQ, which launched 5 years earlier than Facebook, in 1999

Based in Shenzhen and based in 1998, the Chinese firm Tencent enjoys enormous recognition – and earnings – in China.

Its cute penguin image is as acquainted to Chinese kids because the McDonalds “golden arches” emblem is to kids within the West, says the BBC’s China media analyst Kerry Allen.

“Tencent is regarded as a lot greater than only a Chinese firm in China – it has gained a repute as a family-friendly organisation that connects households, buddies and work colleagues in a digital age,” she mentioned.

“It has a enterprise mannequin that different Chinese firms can solely envy – it may possibly attain an viewers of, principally, everybody.”

But many individuals within the West have by no means heard of it.

That doesn’t suggest 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.

WeChat

Like Google’s dad or mum firm, Alphabet, Tencent has a broad portfolio of pursuits, though arguably it stays greatest recognized for its messaging providers.

US president Donald Trump singled out the app WeChat in his most recent executive order, which calls for US corporations cease doing enterprise with it.

WeChat has over a billion customers, each inside China and around the globe – the Chinese model known as Weixin.

It is usually in comparison with WhatsApp – and positively it’s broadly used for messaging – a number of US messaging apps and social media websites are banned by the Chinese state so you’ll be able to’t (formally) Facebook message a pal in Beijing, for instance.

But there’s much more to WeChat than messaging.

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WeChat has over one billion month-to-month customers

It’s extra akin to a separate working system: identical to you may use Google’s Android or Apple’s iOS for a wide range 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 flourishing.

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Tencent’s headquarters are in Shenzhen

Earning outcomes for the primary quarter of 2020 confirmed a complete income of 108 billion Chinese 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 have a look at a few of them.

Gaming

It is evident that Tencent makes some huge cash through gaming.

Tencent is the biggest 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).

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Fortnite

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 permitted for distribution in China.

It additionally owns the whole League of Legends studio, Riot 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 not too long ago accomplished a deal giving it a 10% stake in Universal Music. The file label contains main artists akin to Lady Gaga, Taylor Swift, Drake and Kendrick Lamar on its books.

In addition, Tencent already has its personal music division – Tencent Music Entertainment (TME).

And a share-swap in 2017 noticed it take a 7.5% stake in streaming large Spotify (Spotify acquired 9.5% of TME in return, reported Tech Crunch at the time).

Tencent Pictures, its movie and manufacturing arm, has been concerned in a lot of Hollywood films, together with Terminator: Dark Fate (2019), Wonder Woman (2017) and the upcoming Top Gun sequel, Top Gun: Maverick – scheduled for launch in 2021.

Oh – and there is additionally the small matter of the Chinese large proudly owning 5% of the US electrical automotive agency Tesla.

What is the US involved about?

President Donald Trump says that the unfold within the US of cell apps developed and owned by Chinese corporations “threaten the nationwide safety, international coverage, and financial system of the United States”.

The US authorities says each Bytedance’s TikTok and Tencent’s WeChat “seize huge swaths of knowledge from its customers”.

“This information assortment threatens to permit the Chinese Communist Party entry to Americans’ private and proprietary info,” it claims.

Tencent’s chief govt and co-founder Ma Huateng, referred to as Pony Ma, is broadly assumed to help the Communist Party. He is a member of the National People’s Congress (NPC), China’s nationwide parliament.

Trump’s govt order additionally claims each WeChat and TikTok collect information on Chinese nationals visiting the US, permitting Beijing “to maintain tabs” on them.

Prof Alan Woodward, a cyber safety knowledgeable from Surrey University, factors out that for worldwide customers, WeChat information sits on servers outdoors of China – which means in idea that it’s extra protected against state scrutiny.

However, he added that WeChat’s privateness coverage overtly states that it’ll “adjust to any authorized requests from state companies handy over information they’ve of their servers”.

“Just as with TikTok, the priority is that the dad or mum firm is Chinese and thus it might be argued that they’re certainly topic to the Chinese Intelligence Act,” he mentioned.

Tencent has up to now issued the briefest of responses to the information from the US: “We are reviewing the chief order to get a full understanding,” it mentioned.

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