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Tencent Holdings Limited: Tencent’s Rise to Dominance in the Chinese Internet Industry - Product Image

Tencent Holdings Limited: Tencent’s Rise to Dominance in the Chinese Internet Industry

  • ID: 2390698
  • December 2012
  • Region: China
  • 20 Pages
  • MarketLine

Introduction

Since its launch in 1998, Tencent has grown from an unprofitable, privately owned enterprise into one of China’s leading companies. The company’s continued development has transformed it from a startup to a company with annual revenues of over CNY28bn ($4.3bn) and net income in excess of CNY10bn ($1.5bn). In 2012, Tencent was placed 37th in Millward Brown’s BrandZ 100 most valuable brands.

Features and benefits

- MarketLine Case Studies describe topics such as innovative products, business models, and significant company acquisitions.

- Fact-based and presented in an accessible style, they explain the rationale of commercial decisions and illustrate wider market and economic trends.

Highlights

Although Tencent operates through four business segments, IVAs and MVAs very much remain the backbone of the business. These two divisions accounted for over 92% of the company’s total revenues in 2011, with IVAs in particular providing many of the company’s revenue streams.

The company is highly reliant on its home market of China, a geography which accounted for over 98% of all revenue in 2011, and growth READ MORE >

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OVERVIEW

- Catalyst

- Summary

TENCENT: A BRIEF HISTORY

- Since its launch, Tencent has become a global superbrand
-- Tencent was founded as a provider of Internet value-added services
-- In 2004, Tencent undertook a successful IPO

- Tencent’s operations
-- Internet value-added services
-- Mobile value-added services
-- Online advertising
-- Other
-- This offering has helped establish Tencent as the leading IVA company in China

THE PROBLEMS IDENTIFIED

- The company believes its business model to be unbalanced
-- IVAs represent the greatest concentration issue for Tencent
-- The company has also identified its reliance on China as a problem to be addressed
-- This over-reliance is a concern as active user growth in China is slowing

STRATEGIES TO COUNTER THESE PROBLEMS

- Strategies have been adopted to counter the issues identified
-- Online advertising is a fast-growing area of operation for Tencent
-- M&A and partnerships as a growth strategy
-- Tencent has benefitted from government incentives
-- The company sees online gaming as a large growth area
-- Tencent is growing its international footprint

CONCLUSIONS

- Tencent represents a Chinese success story for the digital age

APPENDIX

- Definitions

- Sources

- Further reading

- Ask the analyst

- About MarketLine

- Disclaimer

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Note: Product cover images may vary from those shown

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