China’s Tencent Holdings said on Thursday (May 20) that it wants to put a greater portion of this year’s incremental profits into sectors that include games, short-form video and cloud services.
As Bloomberg News noted, this news comes as the country’s three biggest tech companies — Alibaba, Meituan and Tencent — are competing for eyes and wallets in the fast-growing online grocery and video sectors.
“Tencent is trying to sustain growth in revenue, which climbed to 135.3 billion yuan ($21 billion) in the three months that ended March, roughly in line with analyst estimates,” the Bloomberg story said. “The results affirmed the resilience of the world’s largest game publishing business as the pandemic recedes. Tencent has shed roughly $200 billion in market value since its January peak, part of a broader Chinese tech selloff.”
However, the company has managed to escape the government’s antitrust crackdown, at least for the time being, “despite its ubiquitous WeChat app offering unrivaled insights into all aspects of Chinese life and a commanding lead in gaming, music and social media clicks.”
Bloomberg Intelligence Senior Analyst Vey-Sern Ling said that Tencent’s new investments are “likely undertaken in part to address increasing competition in areas like cloud computing, online games and short videos, where industry peers have been spending aggressively.”
The news comes one month after Meituan said it was looking to raise around $10 billion to compete with Alibaba by selling 187 million shares of stock and $3 billion in convertible bonds, in what was described as the largest ever sale of new shares by a company trading on the Hong Kong exchange.
Alibaba announced last week that it would try to grow in international markets following a record-setting year in which it topped one billion active users and sold a record $1.2 trillion in gross merchandise value sales. For the first three months of the year, the company saw its digital buyer base grow to 892 million retail customers, with the remainder visiting from outside China.
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