Chapter I Introduction

CHAPTER I INTRODUCTION

Tencent Holdings Limited (Tencent), an investment holding company, provides Internet value-add service (IVAS), mobile and telecommunication value-add services (MVAS), online advertising and e-Commerce transactions. It is China’s largest and most used Internet service portal, the third largest Internet company in the world, which is behind Google and Amazon with USD 38 billion market capitalization. The company offers diverse service include social network, web portals, ecommerce, and multiplayer online games through various segments which are communications platforms, Social platforms, media platforms, Internet value-add service (IVAS), mobile and telecommunication value- add services (MVAS), online advertising and e-Commerce Transaction. Tencent Holdings Limited was founded in 1998 and its headquartered is in Shenzhen, the People’s Republic of China. On June 16, 2004, Tencent Holdings Limited (SEHK 700) went public on the main board of the HongKong Stock Exchange.

1.1 Background

Tencent was formed by Huateng Ma and Zhidong Zhang in November 1998 as Tencent Inc. It was incorporated in the Cayman Islands using funds from venture capitalists. In these earlier three years, the company did not turn a profit for three years. In 2001, a South African company named Naspers purchased a 46% share of the company. At same time, Tencent’s messenger product has changed its name from OICQ to QQ. Tencent joined the Hong Kong stock exchange in 2004 and it was add as a Hang Seng Index Constituent Stock in 2008.

Tencent has grown into one of China’s Largest and most used Internet service portal. The mission of Tencent is to enhance the quality of human life through Internet service. Through the multiple Internet platforms in China – QQ Instant Messager (QQ), WeChat,

QQ.com, QQ Games, Qzone, 3g.QQ.com, SoSo, PaiPai and Tenpay, Tencent services as the China’s largest Internet community in China, to meet the various needs of Internet users including communication, information, entertainment, ecommerce and others. In the November 2010, Tencent became the third largest Internet Company in the world behind Google and Amazon with a market capitalization of USD 38 billion.

Until December 31, 2012, the active QQ users account for QQ IM amounted to 789.2 million while in peak concurrent users reached 176.4 million. Tencent is profoundly influenced the ways of communication and lifestyle of hundreds of millions of Internet users. Total revenues were USD 6,983.3 million in 2012, an increase of 54.0% over the year ended December 31, 2011. The Gross profit of the year 2012 was USD 4, 086.6 million, an increase of 38.3% over the year ended December 31, 2011.

1.2 Purpose

Marketing isn’t as simple as it used to be. A decade or so ago all you had to do was put together as advertising plan, do a few direct mail pieces, and have your publicist put out a regular series of press releases. Today, it’s a lot more complex. Especially in Internet industry, because of the unique structure of the Internet industry, the strategy might not be same as the traditional industries, and the characters of being high technology dependent, short product life cycle, having many market segment, different way of communication and so on, might also lead to other strategies that are different from those traditional industries. This study would like to take Tencent which is one of the China’s largest and most widely used Internet service portals, is already in a leader position in China’s Internet market, to be an example to analysis the internal and external factors with the aid of interviews and empirical data, and analysis the marketing strategy that are used by Tencent. Wish it could provider a basic idea of marketing strategy for the companies as Tencent in the Internet industry.

1.3 Objectives

To identify current market situation To analysis the Marketing strategies of Tencent Holdings Limited To recommend Tencent Holdings limited how to develop the market.