Careers at Tencent
Tencent’s mission is to enhance people's quality of life through Internet services.
Tencent is a provider of Internet services. The firm operates seven reportable business segments: Instant Messaging Service, Online Media, Wireless Internet Value-Added Services, Interactive Entertainment Service, Internet Value-Added Service, eCommerce, and Online Advertising Service.
Tencent was founded in China in 1998 by Ma Huateng (also known as Pony Ma), Xu Chenye (also known as Daniel Xu), Chen Yidan (also known as Charles Chen), and Zeng Liqing (also known as Jason Zeng). The company, a provider of Internet services, received its initial funding from venture capitalists. In February 1999 it released OICQ, a messenger product.
Not long after the release, Tencent faced the threat of a lawsuit from AOL because it had a messaging product with a similar name, ICQ. The company changed its offering’s name to QQ, avoiding the litigation. Tencent initially garnered income solely from its advertising services and premium QQ users, who paid monthly fees for extra features.
After three years, Tencent started to become profitable. In 2004 it became listed on the Hong Kong Stock Exchange. In 2005 it added a cellular value-added service and character licensing to its revenue streams. 2008 saw the growth of profits from virtual goods and game licensing. While it originally relied on releases from third-party developers, the firm went on to produce its own games.
Over the next decade it grew significantly through a variety of investments and acquisitions. These included obtaining a majority equity interest in Riot Games in 2011, a 15% stake in JD.com in 2014, a 28% stake in CJ Games in 2014, and a majority stake in China Music Corporation. In 2015 Tencent’s market value passed $200 billion for the first time and it became the largest Internet firm in Asia.
Business model of Tencent
Tencent has a segmented market business model, with customer groups that have slightly different needs. The company targets its offerings at consumers and businesses.
Tencent offers three primary value propositions: innovation, risk reduction, and brand/status.
The company embraces innovation as part of its culture. More than 50% of its employees work in research and development. Also, it maintains patents for technologies in several areas, including eCommerce, instant messaging, search engine, online payment services, gaming, and information security.
Lastly, it invested over RMB100 million to set up the Tencent Research Institute, China's first Internet research institute, which has campuses in Shanghai, Beijing, and Shenzhen. The program engages in the development of core Internet technologies for innovation purposes.
The company reduces risk through high safety and security standards. It uses the following strategies to protect intellectual property on its network of platforms:
- Reminds visitors to respect IP through user agreements, notifications, and announcements
- Operates an automated monitoring and integrated IP protection system that monitors for infringement around the clock, investigates and gathers evidence of infringement, serves takedown notices, and creates infringement reports
- Proactively deals with infringement through deletion, filtering, and removal of URLs
- Works with law firms across China to document, collect, and preserve evidence of infringement on all prominent Internet and mobile platforms
- Works with other Internet companies, media companies, and intellectual property rights holders to combine strengths to fight infringement
- Maintains a team of dedicated IP enforcement attorneys
- Enforces IP rights through a multi-pronged approach that includes administrative actions, civil litigation, industry alliances, and criminal prosecution
The company has established a strong brand due to its success. It is the largest online services provider in China. Its portfolio features many top properties, including the following:
- QQ:com, China's largest portal in Chinese, which offers news, entertainment products, interactive communities, and basic services. As of July 2016, it had 899 million monthly active user accounts.
- Weixin/WeChat, the world's fastest growing social app. As of 2016, it had 864 million monthly active users.
Lastly, Tencent has over 700 clients, including many Fortune 500 firms such as Coca-Cola, Procter & Gamble, IBM, HP Samsung, Intel, Ford, BMW, Toyota, and Nike.
Tencent’s main channel for consumers is its website, while its main channel for businesses is its direct sales team. The company promotes its offerings through its social media pages, advertising, and participation in road shows and conferences.
Tencent’s customer relationship is primarily of a self-service nature. Customers utilize its services through its platforms while having limited interaction with employees. That said, there is a personal assistance component in the form of phone and e-mail support.
Tencent’s business model entails designing, developing, and maintaining its platforms for customers.
Tencent’s key partners are content providers that provide material for its platforms, as well as various online and mobile service providers with which it has formed collaborations.
Tencent’s main resources are its human resources, who include the computer engineers and scientists that design, develop, and maintain its platforms.
It maintains important physical resources in the form of its network of Tencent Research Institute campuses; a research and development center in the Chengdu Hi-Tech Industrial Development Zone; and a data and R&D center in Tianjin's Binhai Service Outsourcing Industry Park. Lastly, it places a high priority on its intellectual property.
Tencent has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of revenues, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.
Tencent has three revenue streams: revenues it generates from value-added services, revenues it generates from online advertising services, and revenues it generates from other services.
info: Pony earned a Bachelor of Science degree in Computer Science at Shenzhen University. He previously was in charge of research and development at China Motion Telecom Development Limited. He has over 20 years of experience.
info: Martin earned a B.S. degree in Electrical Engineering at the University of Michigan, an M.S. degree in Electrical Engineering at Stanford University, and an MBA at Northwestern University. He previously served as Chief Strategy and Investment Officer at Tencent.
info: Daniel earned a Bachelor of Science degree in Computer Science at Shenzhen University and a Master of Science degree in Computer Science at Nanjing University. He previously worked at Shenzhen Data Telecommunications Bureau.
info: Mark earned a B.S. degree in Computer Science and Engineering at the University of Electronic Science and Technology of China and an EMBA degree at China Europe International Business School. He previously worked at Huawei Technologies Co.
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