by TARIQ ZIAD KHAN
Steven Wright famously quipped: “If it is a penny for your thoughts and you need to put in your two cents’ worth, rest assured somebody, somewhere is making a penny.”
Although said humorously, the saying does encapsulate the business model of the modern social media titans of the world. They have the seed of a great idea, build agile technology that serves customer needs around it and once they hit the critical mass of a global audience, user-generated content becomes the norm, which helps the platform achieve exponential and organic growth.
While this model has worked for most tech companies and social media platforms around the world (or most of the world), there is a hold out in the path of their global dominance… and a big one at that. China.
This Asian rising power, despite a commitment to free enterprise and globalisation (neatly packaged as Market Oriented Socialism), is a no-go area for global social media and e-commerce giants such as Amazon, Google and Facebook (and their popular app holdings). Yup, you guessed it. No Google, no WhatsApp, no Facebook, no Pinterest, no Instagram, no Snapchat.
However, with a population representing one-sixth of humanity and one with a huge appetite for social interaction, as well as retail therapy (on the back of rising disposable incomes), China is a massive opportunity for any tech firm. So, when foreign internet firms refused to work within the straitjacket imposed by the Chinese government, home-grown Chinese dotcoms rose to fill the gap. Fast forward a couple of years and many of these companies now have total dominance over China’s internet landscape, with user bases numbering in the hundreds of millions, if not more.
Although much has been written about Alibaba (China’s answer to Amazon) and their founder Jack Ma, there is a Chinese company that dwarfs Alibaba in size and scale – both in terms of user base and valuation. This is Tencent, a Shenzen-based Chinese investment holding conglomerate, whose many subsidiaries specialise in providing internet-related services and products, telecommunication services and technology, primarily in China and globally, in markets with large Chinese diasporas.
As of September 2017, Tencent (named so because of the similarity to its original Chinese name, Téngxùn Kònggu Youxiàn Gôngsî – meaning ‘Soaring information’) has been listed on Hong Kong’s Hang Seng Stock Exchange and valued at a whopping $522 billion (Facebook is valued at $519 billion), making it Asia’s highest-valued company. It is also the first Chinese company to cross the $500 billion valuation mark, much to the chagrin of Alibaba, which is worth $480 billion.
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