Tencent is top in the Chinese mobile world
Six years into its play for a top spot in the Chinese mobile operating systems market, global Ecommerce giant Alibaba has made scant headway. In 2011, the company’s YunOS was debuted, and as late as last year Alibaba executives were claiming it could attain as much as 25% market share, eclipsing Apple’s slice of the market. Yet today, according to researchers Canalys and Counterpoint, it holds only 2.2% of that market, and its share of 2016 shipments was just 10%. Alibaba refutes those numbers, but the bottom line remains unchanged: in the Chinese mobile market, Tencent is king.
Tencent’s share price has appreciated by an impressive 44% this year
SOURCE: Yahoo Finance
The key to Tencent’s dominance in the Chinese mobile market is WeChat – a universal app that combines messaging, payments, media, shopping and on-demand services into a mobile platform with incredibly high utility. While other players were interested in operating systems, Tencent simply looked to direct existing traffic through WeChat.
WeChat added service after service to build a customer base that is approaching a billion users, and has pioneered a service called Mini Programs, which lets users access third party apps without having to download them – this means it’s managed to recreate some of the functionality of an operating system with an in-app experience.
As Chinese users – who are already very smartphone oriented – move further into the mobile space, this puts Tencent in a strong position. As of April, these users were spending twice as much time on WeChat as they were on Alibaba’s consumer-facing Ecommerce sites Taobao or Tmall.
Dominion holds Tencent in its Global Trends Ecommerce Fund.
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