1/8/2024 0 Comments Tencent china wechat pay![]() This reflects stronger growth in the revenue from online advertising (primarily via WeChat), which rose by 55% year on year in January‑March 2018, as well as rapid growth in terms of "other" services. In 2015 revenue from these services accounted for nearly 80% of the company's total by 2017 the proportion had fallen to 65%. The company is slowly transitioning from reliance on VAS to drive revenue. Tencent breaks down its business revenue into three broad categories: value-added services (VAS)-which consist of the virtual goods the company offers, primarily online video games for smartphones and desktops, such as the hugely popular "Honour of Kings"-as well as the special avatars users can purchase in Tencent's Qzone social network online advertising and "others", which represent revenue from digital payment and cloud-computing services. At end-March 2018 active accounts on the company's mobile messaging and payments app, WeChat, reached 1bn, up from 500m at end‑2014. In 2017 as a whole its revenue and net profits ran to Rmb237.8bn and Rmb71.5bn respectively, up from Rmb78.9bn and Rmb23.8bn in 2014. These latest figures come on the back of a rapid expansion in the business over recent years. In the first quarter of 2018 it reported revenue of Rmb73.5bn (US$11.5bn), up by 48% year on year, with net profits increasing by 61% to Rmb23.3bn. Tencent's recent financial performance, at least based on the headline numbers, has been very strong. However, there remains a lot of room for Tencent to raise revenue via online advertising and digital payments. Despite strong financial results for the first quarter of 2018, doubts have begun to be voiced about the firm, with investors pointing to eroding profit margins and questioning its ability to keep innovating. An internet giant, Tencent, has become a dominant force within the Chinese technology landscape, and with a market capitalisation of around US$400bn ranks only behind local rival Alibaba in terms of Asian corporate valuations.
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