As you may know, some websites like Facebook and YouTube don’t exist in China because the CCP wants to censor what its people see to support local companies. Foreign companies also need to partner with a domestic company to operate in China and with Tencent being so big, it partnered with gaming companies like Ubisoft or Nintendo. Tencent was basically making deals with international gaming companies adapting the games to the Chinese market and then promoting it on QQ. But Tencent also copied some other simple mobile games that were popular in the foreign market, for instance QQ Speed which was heavily inspired by Mario Kart.
Tencent‘s work culture was also very revolutionising. In China, many companies go by a 996, meaning you work from 9am to 9pm six days a week, which is very long for our standards. This is illegal but the CCP often turns a blind eye since these long hours increase production in Chinese tech companies. Tencent also allowed employees to share their ideas like Google with some of their most popular designs coming from regular employees. QQ would then often rip off other companies like Qihoo's 360 Safeguard and make QQ Doctor. If QQ detected you having 360 Safeguard on your phone, QQ would stop working, making you lose online contact to your friends.
QQ was basically used for marketing Tencent’s rip-offs and forcing or blackmailing QQs users into using their rip-offs. From 2005 to 2010, Tencent’s revenue went from 200 million dollars to 2.9 billion Dollars. Unfortunately, as profitable as this was for Tencent, it was making a lot of enemies and it realised that investing in companies was a better solution. Tencent started investing in Chinese companies like jd.com and then promoting them on QQ, which was a win-win for both Tencent and JD. In the early 2010s many people were switching from computers to phones and from websites to apps. Through their successful work culture, Tencent made three groups work on a mobile chat app compete against each other.
WeChat was launched but it wasn’t just a chat application. Soon, more and more features were added. WeChat also became the fastest growing social media app, taking only 433 days to hit a hundred million users, a feat which took Facebook around five years. In China, rather than having to download Uber, you could use the uber mini program on WeChat and WeChat basically became the app store of Chin. Companies needed WeChat to get access to consumers and Tencent was basically taxing other companies.
WeChat has over a billion users and only 100 million are not in China. So why isn’t it successful outside of China? Well, the reason that isn’t successful outside of China is the fact that its successful in China. The Chinese Government can still see messages outside of China. Inside of China, the CCP has access to payment history and chats and they have given each member a social credit score. Cameras across China can use facial recognition to see where people are and what their social credit score is. People with low scores often are shamed on billboards and have their private information leaked. One journalist who came to close to revealing corruption within the CCP, was unable to buy a train ticket or have access to public transport. The CCP also intentionally reminds citizens of its surveillance so that people don’t speak out against them in the first place or start demonstrations.
Tencent didn't intend to make WeChat a surveillance tool but if they were to speak out against the CCP, WeChat would also be banned, so complying with the CCP was probably the best (if not only) solution. Tencent has recently invested heavily in companies outside of China to not be fully under control of the Chinese Government and it usually doesn’t try to over-control the companies it owns because that would reveal how big of a stake Chinese Companies have in western companies. If anything, building a brand and being popular in the West is a strong downside because people underestimate how much stake they have in western corporations and western culture overall.
Things looked bright for Tencent as they became the fifth largest company in the world and were soon to hit a market cap of one trillion. But in 2020 things changed. 2020 was very profitable for Tencent because they had a lot of control over tech in China. However, Donald Trump threatened to ban WeChat and TikTok. Even now, after Biden has come to power, there have been more investigations and proposed restrictions to the two. WeChat has few users in America and Tencent knows that the U.S. wouldn’t ban every company Tencent had a small stake in.
There was, however, another government who had power to take them down as well and that is the Chinese one. Tencent, as we mentioned earlier, is the biggest money-maker when it comes to the Gaming Industry. But in 2018, the CCP was concerned about how many kids were addicted to video games, especially violent ones and all kids were limited to a maximum of three hours of video games a week. Furthermore, a lot of games in China were made less violent and involved more Chinese propaganda.
For the first time in ten years, Tencent had less revenue than the year before and Tencent’s stock was falling. In the span of a year, it lost over 30% of its stock price. In 2021, the CCP fined some of the biggest Chinese tech companies billions of dollars for its monopolistic exercises, which the CCP saw but ignored for many years so that they could use the big firms as surveillance tools. The tech firms had no real choice and the CCP probably did this to get money, since the companies had no power to fight back and they could assert their dominance over the Chinese tech firms.
It's estimated through the CCPs practices, that over 1.5 trillion dollars in market cap of Chinese tech companies were lost at the time. Tencent lost over half its market cap. In conclusion, Tencent is no independent company: it’s been formed and used by the CCP and its future is not up to its CEO Ma Huiateng but to Xi Jinping, since he will presumably lead his presidency until the end of his life.