Tencent’s Pony Ma (sat on right) takes questions from the host and a panel of industry experts.
This afternoon at the Global Mobile Internet Conference (GMIC) event in Beijing, Tencent’s ‘Pony’ Ma Huateng was on stage speaking about his company’s strategy and future. The first question was about the struggle Tencent’s WeChat has with China’s mobile telcos, which is one of the hottest tech topics in China right now. But Ma seems confident that WeChat isn’t going to charge users.
Ma was questioned how WeChat will be monetized by Tencent (HKG:0700). There are quite a few methods – stickers and games – as the onstage panelists suggest. (Line and KakaoTalk have been doing all these so successfully). Ma agrees that these are indeed the ways to make money for WeChat. Another way to make money, he explains, is via offline to online services and also digital products, such as an artist who could share their art on mobile platforms like WeChat. That sounds a lot like digital publishing which Line and KakaoTalk recently started doing.
The next question asked was if QQ, Tencent’s traditional IM service, will cannibalize WeChat. Pony explained that their functions are different, for example push-to-talk and voice messaging never existed on QQ. QQ’s active users are double that of Wechat. Ma says that companies can’t just have a department that helps desktop products turn into mobile products. Rather, there must be a department that needs to focus entirely on building for mobile from scratch.
Ma says that mobile is a very tricky industry; despite the existence of a lot of giant web companies, many of them may not be winners in the end. Tencent is always not at the start of the wave nor at the end. It always comes in at the right time, the host states.
The onstage host commented that Tencent is winning on every front on the Chinese web, especially mobile. But Ma humbly said that search and e-commerce aren’t successful points for Tencent. Indeed, it’s Soso search engine, and its various e-stores, like Paipai and QQ Buy, have always struggled.
Learning from Facebook
Ma says that overs the years, Tencent learned that it couldn’t do everything and will be working with third-party companies closely in the future. He also confirms that WeChat will have social games and assures game developers that Tencent will not be providing their own games. Ma now sees Tencent as a platform company rather than a content company.
The founder and CEO adds that Facebook is the first successful open platform on the web, and that emerged back in 2007. Tencent only got into this kind of space in 2009. Ma says that doing an open platform is technically challenging and must be done with care. So it took Tencent two years, starting in 2011, before Tencent really pushed itself as an open platform company. If I’m not interpreting this wrongly, Tencent seems to be prepping hard for its mobile gaming platform despite seeing KakaoTalk and Line out in the market already.
Will Tencent go into hardware? Ma says he is interested but doesn’t have a clear plan on hardware. One thing’s for sure, Tencent isn’t going to work on a phone. There’s no clue about Tencent doing a Google Glass-like device either.
Pony Ma is also famous for testing the user experience of his own products. Ma explains that he will try to imagine himself as an average user or a not so savvy user to test applications. He says that besides providing a great user experience in its applications, Tencent’s success factor is to keep innovating.
Competition, innovation
WeChat went global in 2012. It now has nearly 400 million users – but most are in China.
Commenting on Alibaba’s investment in Sina Weibo last week, the Tencent CEO says he doesn’t feel threatened; rather, he feels that it is only natural. Instead of clashing, Ma suggests that the real challenge is to keep innovating and create new technologies to serve people better.
When the host asked the panelists if WeChat can help Tencent get on the global stage, all but one person raised their hands. Ma himself feels 50/50 about this opportunity, noting that there are strong competitors overseas – a reference, I believe, to Whatsapp and Line. But as Ma has always said, mobile has given Chinese companies a good chance to innovate and succeed globally.
Ma actually met the NHN Line CEO this afternoon and revealed that there might be a way to collaborate. Both of them agree that once a chat app is popular in the country, it tends to stick on unless something major crops up. Ma explains that in the future, there could be more collaboration. But for now, Line and WeChat are competitors both in China and in the international markets (also note that Tencent has invested in rival Korean-made app KakaoTalk). And Ma believes that to do well globally, localization is important. For example, some aspects of WeChat in China (where the app is called Weixin), such as the ‘drifting bottle’ with secret messages that go out to random people, have been removed from international versions of the WeChat app.
Ma concludes by saying that he is enjoying the journey now as Tencent’s WeChat expands globally. And, regardless of the result, win or lose, he will be giving his best shot to put Tencent and Chinese tech companies on the global map.
This is part of our coverage of GMIC 2013 in Beijing, running today and tomorrow (May 7 and 8). For other stories from this event, click here.