Grace Sun Xia, Tencent’s Senior Director of Corporate Strategy and Investment, sat down for a highly anticipated fireside chat with Harry Wang, Founding Partner at Linear Venture – a VC that works with early stage startups in China – at Echelon Thailand.

I identify opportunities in other markets, and bring in companies to Tencent’s ecosystem,” says Grace, who spent time in Silicon Valley studying & working but returned to China to capture of its market opportunity.

What are her views on China’s ecosystem?

“In China, there is a large capital pool where a lot of companies can go big in a short amount of time.”

“China VCs are constantly looking at Asian markets – our secret is to get local and capable companies to work with us. We want to back them throughout the multiple stages of their business and we want to work with proven Chinese business models to help them succeed.”

What are her views on Southeast Asia’s paralleling ecosystem?

“Tencent started the process looking into the region two years ago,” says Grace. “There are more opportunities than challenges.”

Tencent led Go-Jek’s investment round for $1.2 billion in early May this year to strengthen its presence in Indonesia.

“Southeast Asia is a unique environment, the size is decent, the GDP is $2.3 trillion so technology and innovative business models can drive a large value increase,” says Grace.

Tencent’s Senior Director of Corporate Strategy believes a few business models can be successfully replicated in the region:

  • Share economy: it picked up great momentum in China and has good expansion potential in Southeast Asia.

China is in the process of transitioning from a manufacturing to a service centric economy and this is where “sharing” can drive the shift forward. But big corporations, regulators and the government need to work together to put boundaries around the sharing economy.

  • Tech infrastructure: payment apps need to be built to overcome the lack of credit card adoption.
  • Omni-channel: convergence of online and offline where brick and mortar stores can be used as fulfillment centres.

“In China, all the major ecommerce players have been investing in grocery stores and consumer electronics chains to gain access to a massive population that still shops offline.”

  • Diverse content & media space: China’s media space can facilitate anything from donations, transfer of virtual goods, content licensing, advertising, etc.

“Social platforms don’t have to be the centre piece of all services, Go-Jek is a good example as they are on the way to becoming a WeChat platform. Platforms with high frequency transactions can begin to monetize the traffic.”

“Content is king for all media companies in China. Those with the capability of creating IP (intellectual property) are able to connect with their fans, make income and own all rights to their content.”

Her final comments?

“China is know to be able to re-invent business models, but actually a lot of the new tech is coming out of China. How can anyone get sick of China’s market? There’s so much.”


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