The digital landscape consists primarily of three internet giants: Baidu, Alibaba and Tencent. Almost 60% of time spent on a mobile device in China is spent on an app affiliated with these three giants. They own lots of valuable real estate in the country’s mobile landscape and that figure seems to be growing with time. Different companies but with the common denominator of “diversification”, they chase after the latest trends of the Chinese market.
Baidu has its powerful search engine, Alibaba its successful e-commerce leadership, and Tencent has the China’s number 1 mobile ecosystem.
This article will give you an overview of Tencent’s strength in China’s social media area and the competitive situation between Alibaba and Tencent.
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Tencent’s total revenue in2018 was US$ 11.63 Billion
According to the Q1 financial report of Tencent Group, its YoY revenue growth increased by 48%, which is lower than Alibaba’s 61% growth. However, Tencent’s total revenue is higher, RMB 73,528 million, about US$ 11.693 billion. The increase of online game’s revenue is the most important, about RMB 28,787 million. It’s followed by the high increase of social media revenue (a growing of 47% YoY, representing RMB 18,099 million. Tencent is already the world largest games company, but the company is seeking to become the head of a “pan-entertainment” empire, made up of smaller businesses from different areas. By the ways, one of the most notable information of this financial report is that WeChat has now more than 1 billion active users. Wechat is China’s first communication platform and is keeping improving in its services year after year. Also, WeChat is expanding its influence to the world. Discover the wechat empire in China here.
B.A.T : Between Alibaba and Tencent
Baidu, Alibaba and Tencent had grown through aggressive investment strategy. As Baidu retreated, the two others have been into a battle for O2O (online to offline) dominance in China. Along with the digitalization of the society, tech entrepreneurs and investors scrambled into the online-to-offline market. They are investing time and money, shaking their management team and searching for a strategic partnership to gain ground in China.
Alipay or WeChat ?
WeChat Pay and Alipay are two mobile payment system. They totally dominate the market with respectively 48% and 52% market share. They are China is called a Cashless society by economists, with a majority of Chinese consumers using their phones to make payments, online and physically. A survey founded last year that 70 per cent of internet users don’t regard cash a daily necessity anymore. (Even beggars have their own paper with a QR code their QR code to scan …) The market seems to reach its maturity. The 2 giants are thinking of touching the international market : in Paris, we can already pay through Alipay in the Printemps shopping mall. Also, many small shops around tourist sites are seeking to develop mobile payment in order to attract Chinese clientele. Sometimes, you don’t have the choice between Alipay or WeChat Pay. On apps backed by Alibaba group such as EleMe, it is only possible to pay via Alipay. Actually the ground Alibaba is quite bigger in China.
Where to eat, on Eleme or Meituan ?
How to not be part of this growing consumer’s need? To order dinner became over these years in China a common fact. It is much easier for Chinese to go on food delivery apps than cooking by themselves. ELeMe (backed by Tencent) has now 40% of the market share, followed by Meituan Waimai (backed by Alibaba Group) with 34% of the market share. Besides to be convenient, it is almost cheaper to order through these apps than going directly to the restaurants. In order to attract most consumers and gain their engagement, EleMe and Meituan have been in a pricing war for a while, offering coupons and reductions to their users. They could have dinner for nothing. China’s O2O industry also witnessed mass consolidation and eager to find new models to better combine online and offline resources. “To offer the best service to partners, that’s not enough” said Wang Xing, founder of Meituan, “Our next step is helping merchants to increase the efficiencies of their business”.
Why you should start your Business in China now?
It’s difficult for new entrants to break the control of BAT in China’s internet market. It is almost the same problem when Chinese companies are trying to enter the global market that has been dominated by Google, Amazon and Facebook (the B.A.T of the world). Brands and companies have to work side by side with them.
However, these giants are also bringing opportunities and tools for entrepreneurs. First, because they have their huge users base and represent a valuable mine for data. Second, due to this context of commercial war, new brands who want to enter in the Chinese market could sometimes get advantages from these companies. In fact, the digital in China is opening a lot of new perspectives. Today, you have many solutions to help you start a business in China. You need to know what are them and how to use them for the development of your project.
Need to Start fast, Need a Partner ?
Whatever you are a big brand, a startup or an individual entrepreneur, to achieve the goals you also have to know the Chinese consumer’ habits. Want to enter the Chinese market? Do not hesitate to contact us. Gentlemen Marketing Agency is specialized in the digital marketing in the Chinese market. E-commerce solutions, online marketing, social media and SEO are part of our expertise. (see this excellent article)
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