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Tencent, China’s biggest online entertainment and social network company, has reported a 47% jump in second-quarter profits, reports The Wall Street Journal. Tencent is best known globally for WeChat, the messaging app that dominates the local Chinese market.

Net income for the quarter stood at $1.6 billion (10.9 billion yuan), which beat analysts’ expectations. Revenue for Tencent grew at its fastest rate in more than three years.

The company’s revenue from mobile games more than doubled, contributing to a large boost in revenue growth.

Tencent is in the midst of completing its acquisition of Finlanad’s Supercell Oy, the maker of the popular ‘Clash of Clans’ mobile game, with the goal of increasing the company’s presence in the global market.

In June, Tencent announced that the deal with Supercell is structured in a way that Supercell wouldn’t be consolidated in Tencent’s earnings. The Chinese company would instead reap any financial gains as a stakeholder through the consortium that owns Supercell.

Tencent Q2 Report Highlights 

Tencent generates roughly half its revenue from games distributed through its two major social platforms and its own app store. Tencent’s revenue from smartphone games also more than doubled. 80% revenue was generated on a mobile platform in the Chinese market where Tencent dominates.

  • Capital expenditure was RMB1,505 million, down 47% YoY
  • Free cash flow was RMB9,748 million, up 80% YoY
  • Share-based compensation was RMB862 million, up 31% YoY

Out of China’s three internet titans, the online gaming and social media company Tencent is the biggest, but also the least known in the West. However, it has not attracted the same global attention as Jack Ma’s Alibaba, and Baidu, the Chinese equivalent of Google.

A version of this appeared in The Wall Street Journal on August 17. Read the full version here or download the Q2 results here

India’s newest tech unicorn, messaging app Hike, announced that it has closed $175 million in funding increasing valuation to $1.4 billion, reports Tech Crunch.

The funding round was led by new investors, Chinese tech giant Tencent and manufacturing firm Foxconn. Tencent is the company that pioneered messaging with Chinese favorite, WeChat.

How does Hike work?

Born out of a joint venture between Bharti and SoftBank, Hike includes standard messaging app features, as well as free voice calling. The app emphasizes features such as privacy options to hide messages, and a function that allows users to send messages to non Hike users. The company heavily focuses its marketing on young people.

“Hike understands India, a highly diverse market with many nuances,” says Martin Lau, Tencent President.

Hike has stated that it has over 100 million registered users, 90% of whom are under 30 and send approximately 40 billion messages per month. 

Less like WhatsApp, more like Line

According to Hike’s founder, Kavin Bharti Mittal, every country has two messaging apps that do well, “there’s one that replaces SMS and one that does a lot more than that. Hike doesn’t even compete with WhatsApp, it is used very actively in addition to other apps.”

Hike has been focused on building differentiation from WhatsApp, which has largely retained a bare-basics approach to chat. It has left an option for a more integrated messaging app, in which Mittal has filled the gap with coupons and localized stickers within the app. Games attract over 100 million play sessions per month, and the news feature has 50 million plus users, and sees 1.5 billion stories viewed a month.

These added functions make Hike very similar to Asia’s favorite chat app, Line.

With Tencent’s involvement, Hike is likely to evolve into a ‘services’ app, reflecting Tencent owned WeChat’s numerous services which includes food delivery, ecommerce and much more.

According to Mittal, Hike is likely to introduce a payment solution within the next six to twelve months, among other new service offerings.

Hike is the only billion dollar social company in India, as of now.

 A version of this appeared in Tech Crunch on August 16. Read the full version here.

Chinese based third-party payment platform WeChat Pay’s mobile payment has rolled out its “No Cash Day” campaign this week to boost mobile payment rates, reports China Daily.

From August 1-7, the first payment made of the day by WeChat Pay’s users to any offline store (with a WeChat partnership), could have rewarded the user with a random cash prize up to $133 dollars (888 yuan).

When users use WeChat Pay to make payments on August 8, they can spend the accumulated money rewarded to them over the previous seven days. In addition to this, they have the opportunity to get a direct discount on payments.

WeChat Pay’s main rival, Alibaba’s Alipay, plans to spend over $15 million (100 million yuan) on rewarding its users.

From July 20 to Octover 31, Alipay’s users can receive a direct discount of less than $150 dollars (999 yuan) every time they use Alipay to make payments to offline stores.

Both of the offline mobile payment initiatives by WeChat Pay and Alipay were launched last year.

The number of offline stores cooperating with WeChat Pay in its campaign increased from 80,000 last year to 700,000 this year, following 2015’s success.

China’s third-party mobile payment market scale is experiencing a year on year increase of 111%, according to Chinese research firm Analysys.

The firm still cites Alipay as the leader in the mobile payment market, occupying 63.41% of the marketshare in Q1 this year, while Tencent Holdings Ltd’s Tenpay takes 23% of the market share.

WeChat Pay is an in-app payment feature of Tencent’s WeChat, which means it was launched by both companies in 2013. Its earnings contributed 84% of Tenpay’s mobile payment market share in Q1 this year.

The generalization of no cash payments was originally boosted by WeChat Pay, according to a report by donews.com. During the Spring Festival of 2013, WeChat Pay successfully used the Chinese tradition of sending red envelopes containing money as blessings to promote mobile payments to the masses.

WeChat targets those aged 23-29 years, as they are the main force for driving mobile payment in China.

A version of this appeared in China Daily on August 8. Read the full version here.

Tencent, China’s biggest brand has announced its plans for western expansion through a focus on content, messaging and major global brand investment, reports Marketing Week.

The company currently has more than 1 billion monthly users, and runs the country’s most popular internet portal and messaging services. It is also the most valuable brand in the country, worth one hundred billion dollars, according to Millward Brown’s BrandZ research.

That valuation puts it ahead of the likes of Coca-Cola, Disney and MasterCard.

Regardless of the scale, the company is relatively unknown in the west.

China’s Internet market is so big that it offers an ideal environment for massive Chinese firms like Tencent, owner of WeChat, to establish itself before going global.

In China, trust is one of the most important, so the company itself represents a lot of value and meaning. – Steven Chang, Tencent’s corporate Vice President.

You can have the iPhone but you buy into the Apple brand. And in China, people buy into the Tencent brand. – Steven Chang, Corporate Vice Price of Tencent.

While Tencent may not be that well known among Western consumers, it is a different story with Western brands. And the likes of BMW, Burberry and Nike are all working with Tencent as they look to quickly transition their brands to a Chinese audience.

The ecosystem for China digital advertising is evolving but it will be a China edition. We are not behind; the speed of change is very fast but development is different.

Tencent is also buying in content through exclusive deals with creators such as HBO and NBA, but it is adapting the ‘Netflix Model’ and creating its own content.

A version of this appeared in Marketing Week on August 4. Read the full version here.