Tencent: fighting for its dominance - Matthew Brennan

Matthew Brennan

Tencent might still dominate social media in China with WeChat and QQ, but competition is heating up, and the internet giant is preparing for more competition, says Tencent watcher Matthew Brennan in Asia One. 

Asia One:

"WeChat and QQ are like huge ships … too big to change course to catch a new trend before others," said Matthew Brennan, managing director of consulting firm China Channel. 

WeChat and QQ both saw quarter-on-quarter declines in monthly active users in September, while in the same month Chinese netizens spent 42 per cent of their online time using Tencent apps, down 4.2 per cent from the same month last year, according to a report from Chinese data analytics firm Quest Mobile... 

Tencent also fends off potential competition by blocking access to its ubiquitous WeChat, which has resulted in accusations of monopoly practices. 

Early this year, links to three social media apps - Matong, Duoshan and Liaotianbao - were blocked from opening within WeChat's browser for "containing unsafe content and receiving user complaints", according to Tencent. None of the three potential competitors has been able to pose a serious challenge to WeChat. 

"Social applications have a high rate of failure. Hundreds of WeChat challengers fizzle out, but it doesn't mean Tencent can stop trying," China Channel's Brennan said. "Innovations can still appear, often unexpectedly, so it's sensible for a company like Tencent to have new teams out in the field to explore the boundaries."

More in Asia One.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on China's digital transformation at the China Speakers Bureau? Do check out this list.  

How QQ gets a second life - Matthew Brennan

Matthew Brennan

Tencent's QQ has been the granddaddy of the Chinese internet and seemed on the way out, but is making a comeback, says Tencent expert Matthew Brennan at the South China Morning Post. With a slew of new features, QQ has become attractive for the younger internet users.

The South China Morning Post:

Daily active users of QQ Kandian, the algorithm-driven entertainment news feed within QQ, surpassed 80 million in the first quarter of 2018, according to a first-time release of data from Tencent. And 70 per cent of those users belong to the generation born after 1990. Kandian targets the entertainment-oriented information needs of young users by aggregating rich content related to anime, comics and games, pop stars, extreme sports, fashion, beauty and technology. 

“The success of Kandian does not necessarily get QQ users going up, but the time spent on QQ has increased,” said Matthew Brennan, who tracks Tencent at China Channel, a Shenzhen-based marketing agency. 

Integrating engaging entertainment content into its social platforms is a key focus for Tencent... 

Aside individual products, QQ has also introduced a series of features such as facial beautifying tools, painting-styled photos, animated video stickers, face swap effects and video chat filters designed to make interaction and communication on its social platform more fun and entertaining. For example, QQ users can create video GIFs of themselves, decorate the GIFs with animated stickers and share them with friends. 

“If you use QQ mobile messenger, it feels very colourful and lively … and I think that’s the right strategy,” said China Channel’s Brennan. “Live-streaming, e-sports and short-videos … whatever is popular among young people you can find in QQ.” 

But it’s not just the colourful features that appeal to young people – it’s that sense of using something their elders don’t. What’s childish for mature internet users can be cool for teenagers.

More at the South China Morning Post.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more internet experts at the China Speakers Bureau? Do check out this list.  

Can Facebook overtake WeChat? - Matthew Brennan

Tencent's WeChat has been a winner in China in terms of users but might even beat its Western competitors in terms of functionality, writes WeChat analyst Matthew Brennan at the China Channel. The bigger question is will the tech giants outside China ever be able to catch up?

Matthew Brennan:

Chinese users spend approximately one-third of all their time on mobile in WeChat. That presented a huge opportunity to build extra features and functionality on top of the basic messaging experience. And it was many of these features that hit the China market at exactly the right time, met the needs of local users perfectly, and helped propel WeChat to becoming the juggernaut that it is today. 

Classic examples include Shake-shake, Friends Nearby, Walkie-Talkie, QR Codes, Official Accounts, Mini-Programs, and of course WeChat Pay. 

It’s no coincidence that Tencent was the company to grasp this best, given their previous experience with flagship desktop messaging product QQ. Tencent CXO David Wallerstein had this to say: “When it came time to building value-added services around WeChat, it just came to us very naturally because we had just learned so much over a decade, probably like 12 years of learning by the time we got to WeChat… we also started thinking more about the economy, more about financial services, more about e-commerce, about how do you really transform a business or a hospital or a government using WeChat and I think we had so much experience with platform services and tying services together in a seamless way that when it came time to WeChat, it was like okay, good fresh platform, let’s get everything right this time.” 

The growth rate of new active WeChat users has been steadily declining for many quarters and many — myself included — believe it has pretty much reached a ceiling. The future and focus of WeChat will not be about gaining more new users, it will be about embracing it’s stated vision to “Connect people to people, people to services, people to businesses, and people to objects.” 

The digitalization of daily life continues at rapid pace in China through trends such as mobile payments, online-to-offline services, the sharing economy, smart retail and digital ID cards. WeChat acting as China’s great universal connector is at the very center of all of this and showing little sign of relinquishing its place at the forefront of Chinese innovation. The bigger question is will the tech giants outside China ever be able to catch up?

More at the China Channel.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts at innovation at the China Speakers Bureau? Do check out this list.

Citizen journalism takes off at QQ

the Jinan-page at qq.com

The China Media Project points at a first experiment at Tencent's QQ in mobilizing citizen reporters. On July 18 Jinan was hit by a devastating flood that killed 26. At QQ of Shenzhen-based Tencent editors asked for input of their users:

how is it we have only this frosty [unfeeling] information about "26 dead", 6 missing and 171 injured? We want to know how those deceased passed away, and why ... ( in a translation by the China Media project)

In a few hours time, the dedicated webpage was flooded with material from local citizens, hinting a a failing local government:

Yesterday, the water flooded into our house. Our house is on the first floor. We were just sitting down to eat. Dad went off right away to find sand to fill up bags, but the water came too fast and washed the bags away. It looked like a dam had burst, and the water was putrid. Today Dad's busy building up the threshold. It's too thin and needs to be replaced. No one cares. Our government is just busy making money.

QQ is a highly successful internet service provider, belonging to the top-3 internet companies in terms of traffic and organizing a large portion of the now 162 million internet users in China. Because of that position they are very well positioned to experiment with this kind of citizen journalism and are likely to follow up after this initial success. Citizen journalism is here to stay, how to organize it, that is the question. Officially internet portals can only republish news that has been already in one of the censored traditional media, but this new feature could mean a diversion from those old restraints, if the regulators take it easy.

Update: Global Voices has a thorough overview of all the citizen reporting in China concering the floodings. Nice pictures too.

Crime at the internet: QQ

Virtual China has dived into the legal aspects of virtual property. (The link to the article did not work properly, so you have to find it from the home page.) Between the lines interesting facts show up regarding the crime at the internet.

CNNIC reports that 61% of gamers have had virtual assets stolen and 77% feel that the current online atmosphere is unsafe for virtual assets.

That means the internet is a rather unsafe place to be, worse than anything in the real world. The number of reports on virtual theft is really astonishing.

The Internet Crime section of the Shenzhen Public Security Bureau says they get roughly ten reports PER DAY of stolen virtual assets, which are hard to know how to prosecute given the current status under law. Should they be classified as robberies? Fraud? A judge in Shanghai says that virtual asset cases often cause vigorous debate inside China's courts as to whether they should be classified as crimes or not.
Back in Shenzhen's Nanshan district, legal cases on record have clearly established that 1 Q coin equals 1 RMB, and that Q coins clearly have the attributes of property. Likewise for virtual equipment that can be bought and sold in a market. However, the status of QQ numbers is less clear. Can they be defined as property? Because the value of QQ numbers is hard to estimate, it then becomes hard to define QQ number theft as criminal theft.

More at Virtual China on the legal debate.