February 28, 2024

That glosses over the enormous power imbalance between Tencent and the many satellite companies in its orbit. Colin Huang, founder of Pinduoduo, hinted at this in a 2018 interview in which he complained that WeChat refused to censor allegations of counterfeit goods on its shopping platform.

“Tencent won’t die if Pinduoduo dies,” he said, “because it has tens of thousands of sons.”

No matter how decent or humble Tencent is, it’s a huge corporation with $ 24 billion in profits last year, and spends much of that on investment. It picks winners and losers, but the winners won’t always be the best, which affects innovation and efficiency.

It restricts user access to other products and services. The WeChat app does not allow users to share links for goods on Alibaba’s Taobao online marketplace or for short videos on Douyin, TikTok’s Chinese sister company. (Other platforms are blocking Tencent’s services.) When three social messaging apps were launched in January 2019, they were immediately blocked on WeChat.

Douyin’s mother, ByteDance, shows the possibilities when a company goes on its own. In his early days, ByteDance founder Zhang Yiming accepted a small investment from Tencent to fend off the company, but resisted closer ties. In response to rumors that Tencent would invest in ByteDance in 2016, Mr. Zhang wrote that he did not start ByteDance to become a Tencent employee. He published the lyrics of the song “Go Big or Go Home”.

ByteDance’s independence has paid off. With some very popular online content apps including TikTok, the first Chinese internet product to become a global phenomenon, it is now valued at nearly $ 400 billion.

Tencent doesn’t just advertise for the industry. It has also long tried to get closer to the government. Compared to the sometimes defiant Alibaba, Tencent has long publicly underlined its willingness to fully comply with rules and regulations.

“Now I think it is important for us to understand even more about what the government and society are concerned about and to be even more compliant,” Tencent President Martin Lau said on a conference call in January. Tencent executives used the word “compliant” six times in the call.