Tencent is one of the (ten) biggest companies in the world, you may have heard of it before. But do you really know what they do? Many people think that they make games or apps, they aren’t totally wrong…
However, the correct answer would be everything. Tencent has invested in a lot of things, its scale is unimaginable, and it started all from a small Chinese Company with 1,000$. This may be a great business success story, but it has a dark side as well. In China, Tencent is the biggest corporation and everyone knows that they literally own people’s lives. It’s all because of one app: WeChat. Some describe WeChat as important like water or electricity. Over a billion users have WeChat and they use it for an average of four hours a day, which is double the average American spends on all social media.
WeChat is also dubbed as “the everything app” or “the operating system of China” and makes over a billion dollars in transactions daily. It is basically PayPal, Netflix, Google, TikTok, WhatsApp, YouTube and more in one app. As convenient as this is, WeChat knows everything about you, from where you live to what you send to your friends, to what supermarket you go to.
And this may not come as a surprise but the CCP (Chinese Communist Party) has access to WeChat and Tencent in general. WeChat is currently the CCPs best surveillance tool. All messages on WeChat are scanned if they need to be censored. If anything against the Chinese Government is written it will get deleted or you may end up in a jail cell just like one WeChat user who made fun of a politician who was kicked out of the CCP. Amnesty International analysed how messaging apps handled users' data and WeChat came last with a rating of 0/100.
Tencent has worked with the Chinese Government to wipe out other companies and monopolise industries in China but therefore it is the CCPs surveillance tool, and it has multiple CCP party officials on the executive board of Tencent. Tencent isn’t just the monopoly of China, it’s invested heavily in Reddit, Tesla, Discord, Snapchat, Spotify and many more. Outside of China, Tencent is involved with over a hundred companies. Tencent is the biggest company when it comes to gaming, even bigger than Nintendo, making nearly double the revenue of Sony. Tencent owns League of Legends, 40% of Epic Games, the creators of Fortnite and stakes in Ubisoft and Activision Blizzard along with countless other gaming companies. This is only one of countless industries Tencent is in.
Only recently we (the West) have noticed and looked closer at the power Tencent (and the CCP) has over us. It all started when Ng Wai a popular gamer on one of Activision Blizzards Games endorsed pro-democracy in Hong Kong and was banned for an entire year. The CCP was basically preventing free speech outside of China. In the NBA, the world's biggest Basketball league, Tencent video has a deal to stream all NBA games and after Daryl Morey -the Houston Rockets manager- tweeted Fight for Freedom Stand with Hong Kong, Tencent announced it would not stream further Houston Rockets games and Daryl Morey was forced to apologise. This annoyed many NBA Players especially those on the Houston Rockets team who sarcastically said, “We love China”. Governments in India and America have called WeChat a security threat. But let’s go back to where this all started.
You probably know Mark Zuckerberg, Jeff Bezos or Bill Gates, but have you ever heard of Ma Huateng or more commonly known Pony Ma. He doesn’t say much since he tries to keep both China and the world at peace and is much more introverted than his arch-rival Jack Ma. As a child, Pony Ma never got much attention except for when he hacked his university and got the reputation of being a great coder. Once he graduated, the internet was starting to get increasingly more popular and he thought of business ideas to capitalise off it.
Pony Ma and three of his friends copied a chat called ICQ and directed it to the Chinese market. It was so like ICQ that they named their service OICQ. As download times in China at the time were very slow, OICQ made their chat file size much smaller. OICQ started becoming increasingly popular and started gaining thousands of new users every day. But OICQ was losing money because it wasn’t monetised.
Only nine months in, Tencent received a letter from AOL, an American tech company that invented ICQ and was going to sue OICQ. By that point, OICQ had over a million users. Ma tried to sell the company to stop losing money and to prevent getting sued. Tencent tried to sell OICQ to IDG Capital, a big venture capital company in China. He was brutally honest while trying to sell the company, saying that if IDG Capital doesn’t fund Tencent they will soon die and even if they get funded the future will still be uncertain.
Surprisingly and probably the luckiest moment in Tencent‘s history was when IDG Capital decided to invest in Tencent. Pony Mas made him more trustable rather than new overconfident pitchers. OICQs name was renamed to QQ to avoid the lawsuit and Tencent was back on track. Tencent tried many strategies to make QQ profitable through ads or fees, but this backfired and made some leave. But soon enough Tencent found a website which was very popular in Korea called sayclub.com, it allowed people to make avatars and change their appearances like a video game skin.
Tencent now copied another website and for a small fee you could buy accessories and change your appearance. Soon, over a hundred million people in China were using QQ and even Pony Ma married someone he had met on QQ. In 2004, after four years, Microsoft launched MSN a direct competitor to QQ. As much as Microsoft was more powerful and richer than Tencent, every decision took a long time because they had a lot more executive board members and employees. Microsoft was also more invested in their battle with Google and other tech companies in America and by 2005 over 500 million people in China had QQ installed.
Beating Microsoft was big for Tencent and gave them a new wave of investors and money for the next steps. Lots of people in China used QQ as a gaming chat app and so Tencent integrated games on QQ without having to find new users they could just put it on one app…
But now we need to come back to the CCP. If you want to learn more about Tencent please wait and read my next article about Tencent.