No longer a disruptor, Tencent turns sights on industrial internet in strategic shift
By Dzof Azmi May 22, 2019
- Adopts different tack, instead of disrupting industries, will digitise them
- CEO stresses putting end to evil use, tech for kindness part of Tencent future
TENCENT on May 21 announced a shift in strategic direction from being a company that mainly serves the consumer internet to one that also embraces the industrial internet. Clearly, despite having a user base of 1.1 billion with a market value of more than US$400 billion (RM1.67 billion), Tencent believe they can still do better.
Specifically, Tencent president Martin Lau (pic) says that his company now wants to see other industries not as rivals but as partners; and that Tencent is no longer a disrupter of sectors, but one that helps them digitise.
[Correction: An earlier version incorrectly referred to Martin Lau as CEO of Tencent.]
This shift will be powered by Tencent Cloud, their cloud services solution, and is seemingly part of a process to be a platform as part of a complete top-down solution, from improving productivity through to interacting with customers.
This was announced in his keynote address during the Tencent Global Digital Ecosystem Summit. To underline the holistic nature of this announcement, this year's convention is a combination of several of last year's events: The Internet-digital conference, the Cloud-Future and Overseas Partner Conference.
Lau also said that instead of an "open ecology", he wanted to build an "ecology of openness", stressing that the Internet is no longer an industry itself, but instead a core component of industries.
In the process, Lau hopes that this will make Chinese companies more competitive, citing that although the GDP of China is close to that of the US, China labour productivity is only one-eigth of that in the US.
[Editor’s Note: GDP growth can be measured in different ways. Read this for an overview of China’s growth.]
"(We can) leapfrog development by using digital technology. There is a lot of room to grow," he declares.
A partner for progress
Tencent freely admits that it's partnerships they are looking for. Dowson Tong, Tencent senior executive vice president, acknowledges that Tencent cannot possibly have a deep understanding of every industry they hope to work with. Instead, Tong says they would like to emphasise their role as an assistant, with Tencent acting as an open platform.
Tencent feels they are well-suited for changes to the marketplace. For example, marketing to the customer has changed from being a one-way broadcast to cultivating word-of-mouth, says Tong. And because customers have a greater say, it has resulted in products being closer to their needs.
Tong maintains that interacting with the public is an area that Tencent excels at, given their experience in running WeChat and QQ (an instant messaging software service run by Tencent). He promises they can deliver deep user insight, creating what he calls a B2C2B loop.
Powered by Tencent Cloud
Tong emphasises that Tencent will leverage the cloud to export their business capabilities to the outside world, and is confident Tencent Cloud is ready to take that role. The cloud services company recently crossed the threshold of being the first in the world to host more than a million servers and in the process transferring more than a hundred terabytes of data.
"This is what Tencent has always wanted to do," he explains. "We have a clear roadmap for development.”
Despite this heady ambition, Lau maintains the company must remain grounded and keep in mind that technology should be to benefit society.
“Avoid abuse and put an end to evil use,” Lau stresses. “Technology for the sake of kindness is part of Tencent’s future.”