Tencent is only known to a few in this country. The company from China is one of the giants of the technology sector. Together with Baido and Alibaba, the corporations are even more influential than GAFA, consisting of Google, Amazon, Facebook and Apple.
The Chinese Internet group Tencent, which dominates the Asian market, is active in many areas. Especially in instant messaging, social networking, online media, interactive entertainment and web commerce. Through global acquisitions, Tencent was even able to increase its influence and is now one of the most valuable corporations in the world. However, Tencent is not undisputed in the West. In the meantime, the wind is blowing hard in the face of the company even in its home country of China.
The emergence of Tencent
Tencent was founded in Shenzhen in 1998 by Ma Huateng and Zhang Zhidong. In 2021, with a market capitalization of EUR 418.3 billion and sales of EUR 81.6 billion, it was not only the largest and most valuable company in China, but also one of the most valuable in the world (11th place). Tencent does business with everything the Internet has to offer: instant messaging services, social networks, online media, online gaming and online commerce.
This impressive development was made possible not least thanks to the ruling Chinese Communist Party. For fear of increasing criticism of its policy of suppressing opinions, it had rigorously switched off Western platforms and services such as Facebook, Google, WhatsApp and Twitter years ago. Tencent then filled the resulting vacuum with its own offers. Today, the company is considered to be the Chinese Facebook with its social network QQ, one of the ten most visited websites worldwide, and the Chinese WhatsApp with its messenger service WeChat. Tencent also has alternatives ready when it comes to search engines (QQ Games SoSo), payment services (WeChat Pay and Tenpay) or email clients (Foxmail).
Also read: What you should know about the smartphone manufacturer Vivo
Tencent has a hand in many companies
Tencent’s activities have long gone beyond China. As early as 2008, they started buying up blocks of shares from a whole range of western companies in order to prevent them becoming too dependent on the Chinese market. So you first acquired shares in Riot Games, the US online and computer games company, from whose forge, among other things, “League of Legends” comes. Through further acquisitions, Riot Games could even be taken over completely.
The Finnish Supercell (including “Clash of Clans”, “Clash Royale”) now belongs to Tencent, and another future takeover candidate could be Epic Games, in which the company holds a 48 percent stake. Shares are also held in Spotify and Snapchat, among others.
While these strategic purchases are obvious because of their thematic affinity to the Tencent portfolio, the stake in Tesla is surprising, at least at first glance. It is true that you “only” have five percent of the shares. But that alone makes Tencent one of the largest shareholders in the US electric car manufacturer, which is almost cult-worshipped by its fans.
Data and child protection
However, Tencent’s success cannot hide the fact that the company has repeatedly faced harsh criticism in the past. Points of criticism were and are, for example, the handling of customer privacy, but also brand piracy or a lack of child protection. To date, Tencent is refusing answers on how to respond to government inquiries about messages sent through WeChat. And the company reacts with all severity to tangible criticism. When three bloggers on WeChat commented critically on Tencent’s behavior in 2019, the three were immediately sued. A policy of intimidation, with which Tencent is clearly on course for government.
When it comes to child protection, however, one seems to have learned something. However, this shows that Tencent solves problems with a sledgehammer, so to speak. Since late summer 2021, between 10 p.m. and 8 a.m., only those who are at least 18 years old have been allowed to play on the computer. This is controlled via a data check on the ID card. In the meantime, we have even gone one step further. Minors can now only play for one hour a day during the week and two hours a day on weekends and holidays.
Also read: What you should know about the manufacturer Anker
The KP does not even stop at Tencent and Co
The fact that these measures are based on self-control and the knowledge that it is detrimental to the development of minors, day in, day out, in front of the computer or mobile phone, can at least be questioned. Because such far-reaching decisions are usually only made by one institution in China – the Communist Party. And indeed, there were indications that the authorities would take tougher action against the providers of online games. At the beginning of August, for example, a state business newspaper had already disqualified online games as “spiritual opium” and “electronic drugs”. A clear signal to those responsible at Tencent.
In general, it has been observed for some time that the KP puts the country’s tech companies, which have grown into mega-corporations in just a few years, in their place as soon as they develop something of a life of their own. So captioned “ARD online‘ in June 2021, ‘Beijing takes on tech companies’, quoting Duncan Clark, head of Beijing-based management consultancy BDA, as follows: ‘It appears that the government in China is rethinking its relationship with the big tech companies.’ Obviously, some of the big tech companies grew too quickly for the communist state leadership – and above all too powerful. The outstanding position of the communist party repeatedly leads to tensions between the large state corporations supervised by the CP on the one hand and the private sector on the other.
And just one post in China can cause even the richest man to suddenly fall low. In 2021, for example, a comment made online about China’s banking system cost the head of Ant (parent company of the payment and financial services app AliPay) the IPO, which would have brought the company 30 billion euros in just a few hours. The instruction to stop is said to have come from the very top.