Why Tencent is slow to monetise WeChat
Tencent's monetisation strategy runs counter to traditional business norms. The tech giant prefers to take it slow, and protect its user experience.
THE US$22 billion Chinese technology giant Tencent is sitting on an advertising goldmine. Just 18 per cent of its total revenue in fiscal year 2016 came from online advertising, and industry analysts believe that the company's WeChat social media app in particular is under-monetised.
Compare this with Facebook's model: advertising makes up 98 per cent of its total revenue. So why hasn't Tencent yet made the most of its advertising potential?
To answer this, we need to understand its monetisation strategy - and its philosophy on user experience. And to do that, we must go back to the company's start. Co-founded in 1998 by Ma Huateng (or Pony Ma) and four friends, Tencent launched its first product - a free PC-based instant messaging (IM) service called OICQ, later renamed QQ - in 1999.
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