Has Tencent Become a Private Equity Fund?
Has Tencent become a private equity fund?
A powerful ecosystem that spans across various industries
Tencent’s products and services helped shape China’s digital ecosystem
- The giant Chinese tech company offers products and services across many sectors
- For instance, the so-called Super App, WeChat has become an indispensable part of daily life for many Chinese citizen
Tencent’s revenue mainly comes from China, with a total of RMB609bn (US$84bn) in 2023
Value-added services represent almost half of Tencent’s revenues
Around 60% of VAS revenues come from games
Tencent secured its global presence by serving the needs of its customers
- The world’s 24th most valuable company
- One of the top 10 global cloud service providers in 2024
- Ranked the biggest public video game company by revenue in 2023 by Newzoo
Tencent has tapped into 1bn Chinese internet users
- WeChat – ranked the most used social media platform in China
- Honor of Kings game – ranked the highest played game in China
WeChat and QQ users are among the largest in the world
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Interesting facts about Wechat
- From a 2016 analysis, its 889m monthly active users spent an average of 50+ minutes and about 10 separate times/day
- This is the same as the “combined time” users spend daily across all Meta apps such as Instagram, Facebook, Facebook Messenger, etc.
Tencent is facing tough competition from 4 established competitors
Tencent – China – Founded 1998
Comm. Services sector, 105,417 employees, US$84bn revenue
Main segments/products
- Tencent Games
- Tencent Video
Its competitive advantage
Competitive advantage through scaling diverse digital services, gaming dominance, and strategic investments.
How it achieved its competitive advantage
By creating a powerful ecosystem that spans across various industries such as gaming, social media, e-commerce, entertainment, and more. This ecosystem helped the company dominate the market.
Built on innovative mass market products
Since 2011 has been expanding through acquisitions
Is the company financially world class?
I use my World Class Benchmarking scorecard to measure if a company has a competitive advantage
I developed this scorecard ten years ago; here’s how we construct it
- My team gathers the yearly and quarterly financial data of 26,000 companies worldwide
- We then calculate each company’s Profitable Growth score
- Which is a composite measure of both profitability and growth
Download the full report as a PDF
I use my FVMR methodology to determine the attractiveness of the company
Download the full report as a PDF
Download the full report as a PDF
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