HONG KONG – Chinese internet group Tencent Holdings has pledged to open up its platform of billions more users to business players – including competitors – while Beijing step down against a monopoly aimed at large tech companies.
Tencent President Martin Lau told investors on Wednesday that its platform is open to business players and that collaboration with any major companies must be “mutually helpful”, responding to media reports that Tencent allowed the Taobao market to sell Alibaba Group Holding through its minors program
“I would say that our general principle is that we are open in nature, we have an open platform that encourages organic collaboration with other platforms,” Lau said in an employment call.
While emphasizing Tencent’s openness, Lau stressed the responsibility to protect the privacy of users and the need to prevent the spamming of users in any collaboration.
For months, Tencent has been targeted by Chinese regulators on many fronts, including investigations into anti-competitive allegations, financial services, the collection of personal information as well as its new community group buying business.
The promise of openness came when the operator of the popular social networking app Weixin posted better-than-expected annual results with a pandemic-related jump in online, social and work-related gameplay.
Tencent’s net profit for 2020 rose 71% from a year earlier to 159.85 billion Yuan ($ 24.5 billion) under International Financial Reporting Standards. Total revenue grew 28% to 482.06 billion Yuan, driven by strong movement for the company’s most popular mobile games and advertising sales resale.
During the conference call, Lau also played the impact of a media report that Chinese authorities urged the company to move its financial services business to a separate property company that would be subject to stricter rules.
“From our understanding, the financial property company is in itself neutral. It involves organizational change. It does not have a significant impact on the businesses,” Lau said, adding that the financial industry was on- Tencent line is already surrendering before Beijing recently opposed an online loan. customs.
Pony Ma, chairman and chief executive officer, said in the same conference call: “We will continue to work closely with the regulator and industry partners to deliver fintech compliance products while prioritizing risk management across scale. “
Tencent Holdings in particular successfully sold video ads for their WeChat app, while declining advertising from Tencent Video’s long-standing video platform declined. © Reuters
Tencent, along with other Chinese tech groups, was recently fined by Chinese for failing to account for past investments in smaller companies.
Tencent chief financial officer John Lo told investors that China’s anti-monopoly tightening will have little effect on ongoing investments, as the company tends to take on minor promises in companies.
“A different regime of trust will not affect the usefulness of investing in and supporting start-ups and helping them grow into big, better companies over time,” he said. .
Despite all the regulatory challenges, Tencent maintained steady growth of its core gaming industry.
Online games revenue grew 36% to 156.1 billion Yuan, led mainly by players of Tencent’s mobile apps that generate three times the revenue of PC users .
Online games revenue from social networking increased 27% to 108.1 billion Yuan, powered by consolidation of results from games-focused live streaming company Huya, after Tencent acquired majority ownership last year.
Online advertising revenue increased 20% to 82.3 billion Yuan, thanks to strong demand from clients in the sectors of education, internet services and e-commerce. Tencent had particular success selling video ads for its WeChat app, while declining advertising from Tencent Video’s long-standing video platform declined.
Revenue from online finance and cloud computing increased 26% to 128.1 billion Yuan, as more companies moved online operations and communications.
At the same time, Tencent is also looking to take advantage of the so – called videolization trend, where people spend more time watching videos for both entertainment and learning.
Tencent launched its own short video platform within Weixin last year, joining the competition with popular apps Kuaishou and ByteDance’s Douyin. Lau said the unit was seeing “very healthy” growth in both users and communication time, but declined to publish specific numbers.
“We are very much focused on building the ecosystem of content providers as well as the audience,” he said, “monetization is not too long a question for us to answer at this time.”