1. Tencent QQ Wechat Presentation Eva Lau Florence Sit
Good morning everyone! I am Florence. I am Eva. Today we are so happy to share our analysis for Tencent QQ and wechat to all of you.
Eva Lau
Florence Sit

2. Content E-business in the world E-business in China
Tencent QQ and Wechat:
Company Overview
and key business figures
Situation Analysis
competitors’ analysis
E-business strategies
Communications
Before we start, I would like to talk about what we are going to present. Firstly, we would like to talk about the E-business in the world and China. Then we will focus on one of the E-business company which is Tencent QQ.

3. E-business in the world

4. E-business in the world
E-business (electronic business):
buying and selling of products or services is conducted over electronic systems such as the Internet and other computer networks
with a click of the mouse, a transaction can be completed

5. E-business in the world
Business-to-consumer (B2C) :
customers gathering information
purchasing physical goods (i.e.such as books or consumer products)
information goods (or goods of electronic material or digitized content, such as software, or e-books)
second largest and the earliest form of e-commerce
Business-to-consumer e-commerce, or commerce between companies and consumers, involves customers gathering information; purchasing physical goods (i.e., tangibles such as books or consumer products) or information goods (or goods of electronic material or digitized content, such as software, or e-books); and, for information goods, receiving products over an electronic network. It is the second largest and the earliest form of e-commerce.

6. E-business in the world
Interactive Media in Retail Group (IMRG), a U.K. online retail trade organization:
Over 1 trillion euro ($1.25 trillion) by 2013
the total number of Internet users will increase to approximately 3.5 billion from around 2.2 billion at the end of 2011
Global business-to-consumer e-commerce sales will pass the 1 trillion euro ($1.25 trillion) mark by 2013, and the total number of Internet users will increase to approximately 3.5 billion from around 2.2 billion at the end of 2011, according to a new report by the Interactive Media in Retail Group (IMRG), a U.K. online retail trade organization.
The study estimates that business-to-consumer e-commerce sales in 2011 increased to 690 billion euros ($961 billion), an increase of close to 20% from a year earlier.

7. E-business in the world
business-to-consumer e-commerce sales in 2011 increased to 690 billion euros ($961 billion)
an increase of close to 20% from 2010

8. E-business in the world
Leading countries:
In terms of retail value, since 2007, Us is the largest market for e-commerce. Starting from 2012, China exceeds Japan to become the second largest market in the world.

9. E-business in the world
Leading countries:
In terms of growth rate, China has the fastest growth rate in 2012 and Note that Japan has a negative growth rate in It may due to their contract economic development.

10. E-business in the world
Leading Companies (E-business only, excluding traditional retailing):
In terms of leading companies, Amazon is dominated in many countries such as US, France, Germany etc. But in China, it is less popular, it ranked the fifth only. Following Tencent QQ which is our presentation topic.

11. E-business in China

12. E-business in China the world’s 2nd largest online market
150 million users
amounts to RMB406 billion in 2012, with current value growth of over 80%
continue its booming trend
driven by competitive prices, the convenient shopping process and wide product ranges

13. E-business in China
Apparel internet retailing sees the strongest current value growth of 128% in 2012
Taobao.com dominates the internet retailing category, with over half of total value sales in 2012
The forecast value CAGR is expected to remain robust, at over 29% between 2012 and 2017

14. E-business in China
From less than 100 billion in to more than 400 billion in the growth rate is very fast.

15. E-business in China
From 2012 to 2017, the market will growth steady and the retail value will become very large. It will be more than 1 trillion since 2015.

16. E-business in China
Taobao occupies more than half of the market, followed by 360buy.com and suning.

17. E-business in China Overall, 1. Alibaba Group (Taobao, Tmall)
2. 360buy.com (now changed its name to Jingdong JD.com)
3. Suning.com
4. Tencent QQ
5. Amazon.com, Inc.

18. Company Overview

19. Company Overview Tencent Holdings Limited
Founded in November, 1998 by a young Chinese entrepreneur ‘Ma Huang Teng （馬化騰)’
Listed on Hong Kong Stock Exchange in 2004
Internet and media industry leader in China
Business to Consumer (B to C) e-commerce operation
Leading Internet platforms in China are : QQ (QQ Instant Messenger), WeChat, QQ.com, QQ Games, Qzone, 3g.QQ.com, SoSo, PaiPai and Tenpay
Young enterprise established by a young entrepreneur

20. Company Overview Popular instant messaging software services – QQ
grown into China's largest and most used Internet service portal
Mobile chat service - Wechat bolstered the continued expansion of Tencent in smartphone services and targeted at users in international market

21. Company Overview Corporate culture
Vision: To be the most respected Internet company
Mission: To enhance people's quality of life through Internet services

22. Key business figures Tencent announced Q3 2013 results on Nov13 2013
Gross profit increased 2.6% over the last quarter
Revenue increased 36.6% over the same period last year
Significant increase

23. Key business figures Performance over the past few years
Average profit margin growth during 2008 and 2012 is 38.58%
Steady and optimistic growth for investors
Revenue earned recorded high from year and year
Number of employees increased by employees from 2008
Continued surge in revenue is expected with the more rapid expansion of e-business and online advertisement

24. E-business contributed to the rise in revenue significantly
In 2009, Tencent advertising revenue reached RMB 962.2million, 17.5 times more than that of 2004

25. Marketing strategies

26. 4P – Product Mass media Entertainment
Internet and mobile phone value-added service
Online advertising services

27. 4P – Price Core products such as QQ and Wechat are free
Expanded products such as fancy weapons, costumes for their avatars and online VIP rooms charge

28. 4P - Place
Users not only get the software installation package from Tencent’s homepage, but also by major software platform
easy to get

29. 4P - Promotion TV advertising: commercials and sponsoring TV shows
Online advertising: videos and search engine
CSR: charity events

30. QQ & Wechat
Situation Analysis

31. Situation Analysis – QQ
Tencent QQ released in Feb 1998 – China’s most popular instant message (IM) services
By Q3 in 2013
active QQ users amounted to million monthly while its peak concurrent users reached million

32. Internal analysis – QQ V S
Due to the trademark infringement with ICQ which is the first developed IM by an Israeli company, name changed from OICQ to QQ
Clarify the disputes caused by copyright and settled down the law issues related to the property right and registration of domain name in 2003  Facilitate better future expansion of QQ
V S

33. Internal analysis – QQ Types of QQ (IM) QQ
Basic functions of text messaging, voice chat, video call and
online (offline) file transmission
QQ Enterprise
Connects business entities with the QQ user database
Tencent Messenger
Designed for office environment
Upgrades
Continued upgrade itself since 1999
Latest version – QQ 2013 released on for Windows’ users
– QQ for Mac released on for IOS users

34. Internal analysis – QQ Compatibility Support cross-platforms
Compatible to a large amount of operating systems:
Android, IOS, Linux, OS X, Windows, Windows Phone, Windows mobile/CE, Symbian, Java ME, Web App
Highly increase flexibility for users

35. External analysis – QQ
In China market, main competitors in instant messaging field:
Fetion, Liao.189.cn, Mobile Wangwang, Renren
But still, QQ dominated the market by cumulative account number
38.07% of market share in China

36. External analysis – QQ
In global market – instant messaging field, main competitors:
Windows Live Messaging (MSN), Facebook, Skype, Google plus
Although QQ enjoys million users, QQ users
are mainly confined to China market
Europe market and American market of IM
are still led by MSN, Skype

38. Situation analysis - Wechat
Wechat (Chinese pinyin: Weixin)
fast growing instant messaging platform of smart devices
By Q3 in 2013
active Wechat users amounted to million monthly with 100 million users registered outside China

39. Internal analysis - Wechat
Firstly released in February 2011 named ‘ Weixin ’
Featured by voice chatting – Convenience
Grab market share of IM in smartphones in China
Re-branded as ‘ Wechat ’ in April 2012
Get into international market of Instant Messaging
Enhance the awareness of Tencent limited worldwide
Create online business opportunities through multiple functions
Enables promotion delivered from business to consumers

40. External analysis - Wechat
Contrast with QQ,
Competitors of Wechat are more international
Whatsapps, Facebook, Skype, Line, MSN
Viber

41. Competitor analysis

43. Social networking apps in smartphones
Whatsapps took a lead in Brazil, south Africa and Indonesia in terms of market share
Though Wechat only led in China, it occupied most of the market share in local market

44. Whatsapps WhatsApp Messenger Cross-platform IM for smartphones
Released in 2009 by American company ( Whatsapps. Inc )
Targeted customers: Worldwide
More than 90% reach in Latin American countries
Over 190 million monthly active users
Share 400 million photos each day
Handle 10 billion messages per day
Simple and clear template
Multi-functions
Last seen shown
2 ticks representing successful sending
User-friendly – No advertisement

45. Whatsapps vs Wechat Monthly Active users comparison
Monthly Active user of whatsapps increased – 20 billion within a half year
Monthly Active user of wechat increased – 8 billion within a half year
Both enjoy foreseeable growth

46. Line Japanese Proprietary application IM on smartphones and PCs
Launched in 2011 by Japanese company
Reached 100 million download in Jan 2013
Hit 300 million in Nov 2013
Targeted at:
Asian countries
Establish office in USA for expansion
Featured by:
Adorable stickers – charged sticker stores
Line games
Show the status of ‘Read’ the message
Funny and cute interface

47. Promotion of Line vs Wechat
Line: Asian countries – Invite pop stars to film TV advertisements
Captured attention from teenagers
Siwon – Korea ;  Katrina Kaif – India
Wechat: Asian countries – QR code of shops
Promote itself through QR code functions
through others (e.g Starbucks)
Win-win situation
Celebrities effects

49. Fetion Fetion (Chinese Pinyin: Feixin)
Literally means ‘flying letters’
Developed by China Mobile telecom in 2007
Cross-platform IM for smartphones and PCs
Targeted: China Mobile telecom users
( Mainly join the local competition in China )
Charge 5CNY per month for VIP users
Followed by QQ and Wechat as
the third large IM in China
occupying 18.37%

50. Facebook Social networking website Founded in 2004 Used worldwide
Its Facebook Messager competed
with IM in the market
Top social communication tools in
USA BUT
Due to restrictions on Internet usage
FB is banned in China
Barrier to enter China market to
compete with QQ or Wechat

51. MSN The MicroSoft Network Debuted as Online services provider in 1995
Entered China Market as IM provider in 2005
Recorded 25% increase in number of customer used
just within 4 months
Reached more than 60% in market share at peak in 2008
Favorite communication tool for white-collar in China
Fade out in China due to the lost to QQ
Left only 45 million users in China while QQ already
enjoyed 600 million users in 2012
Only occupied 2.38% of market share in China in 2013
Microsoft took over Skype in China
Shift the users of MSN to Skype

53. Tencent – E-commerce

54. Tencent – E-commerce a key component in its "Online Life" strategy
Paipai.com
Tenpay
Accounts only
little proportion of
its revenue

55. Tencent – E-commerce Paipai.com Tencent's online trading platform
consists of a number of major channels, including women, men, online games, digital products……
Strategies:
Online Life
personalized customization
fashionable and trendy brand culture
takes full advantage of Tencent's QQ and other services

56. Tencent – E-commerce Tenpay online payment system similar to PayPal
Strategies:
Online Life
personalized account applications
individuals can use TenPay for utility payments and to refill their public transport cards
In some Chinese cities individuals can use TenPay for utility payments and to refill their public transport cards

57. Communications

58. Communications Two-way interaction between it and consumers
Deliver value to customers
1. Experiential Marketing
2. Network Marketing
3. Event Marketing

59. Communications 1. Experiential Marketing
Free product trial such as QQ android and QQ mail
Collect customers' feelings and suggestions
Do product revisions
Company brand promotion

60. Communications 2. Network Marketing
Depends on consumers’ initiative and participation
Those who carry and transmit information
E-card: logo on it
Consumers engaged in promotion the company

61. Communications 3. Event Marketing
Establish a corporate socially responsible brand image, enhance reputation, thus achieving consumer recognition, etc.
2007 Tencent Charity Found was established
2010 Shanghai World expo
Consumers extended acceptance and satisfaction towards Tencent

62. SWOT analysis

63. SWOT analysis Strengths Large number of users Huge customers base
Weakness
Copycat image
Most products are popular in China only
Compelling advertisement
Opportunities:
Number of internet users in China continues to rise
Development of smartphone
Threats:
Fast changing online environment
Rely on huge investment

64. Conclusion Tencent is ranked the forth in China’s e-commerce market
With the gradual fading out of QQ, Wechat outperformed in China and starts to engage in international market
The coming years are critical for entering international IM market