Apps vs alliances: The SEA playbook of rivals Tencent and Ant
Both companies’ strategies underscore their visions of South-east Asia’s fintech market potential
AT THE recent Singapore Fintech Festival (SFF), Tencent and Ant Group signalled their renewed ambitions for global growth. The Chinese giants were the event’s grand sponsors.
These companies dominate China’s digital payment space and have chosen South-east Asia as the launchpad for their vision. Their presence at SFF reflects their focus on cross-border payments – a sector projected to reach US$250 trillion in global flows by 2027.
Driven by international trade, e-commerce, and expanding supply chains, this surge translates into US$200 billion in annual revenue for payment service providers, according to Citigroup.
For Tencent and Ant, capturing even a fraction of this market would provide substantial growth, yet their strategies reveal differing visions of how to succeed outside China.
Downloads vs collaboration
Tencent’s approach to cross-border payments remains tied to its messaging platform WeChat. Therefore, South-east Asian users have to download the app to access Tenpay, the international payment solution under Tencent.
While WeChat is convenient for Chinese tourists and expats, Tencent’s “download-first” model is ill-suited to South-east Asia’s highly interoperable payment networks. In countries such as Singapore and Thailand, for instance, users can rely on services such as PayNow and PromptPay. These are not standalone apps; instead, they’re systems embedded in local banking apps, enabling cross-border transactions without requiring additional downloads.
Tenpay secured a major payments institution license in Singapore, signaling Tencent’s intention to capture regional market share. To introduce its palm recognition technology for digital payments in international markets, the company announced a partnership with Visa at the SFF.
This may add a small degree of convenience for some users, but fails to tackle the core question of how Tencent will integrate with South-east Asia’s increasingly open infrastructure. The company’s solution remains anchored to China-focused WeChat and may alienate existing users of local banking tools.
Tencent’s success in China was aided by regulatory protections and privacy rules that effectively created a closed system in which WeChat pay flourished. Elsewhere, these advantages are less pronounced, complicating Tencent’s efforts to form regional partnerships in a market built on interoperability and cross-border collaboration.
Like Tencent, Ant launched its go-global strategy as early as 2015 to primarily serve Chinese outbound tourists. Since then, the firm’s growth overseas has relied heavily on forming local partnerships rather than attempting to control market share single-handedly.
Ant has forged ahead with on-the-ground collaboration even during tumultuous times like the sudden suspension of its dual listing in Shanghai and Hong Kong in 2020 and a US$984 million fine last July, which marked the end of China’s regulatory clampdown on the firm.
Ant International, the company’s global business, is teaming up with e-wallet operators and banks and acquiring companies across South-east Asia, emphasising adaptation over pursuing market dominance for its standalone app.
At SFF 2023, introduced its 4T framework, summing up a global vision focused on travel, trade, technology, and talent.
Ant’s Alipay+ solution promotes flexibility and accessibility by bridging various payment methods and supporting cross-border functionality in Asia. This allows users of multiple e-wallets to transact across regions without downloading additional apps or needing a central Alipay account.
For instance, a TrueMoney user from Thailand can use their wallet in the Philippines, where Ant has a tie-up with local app GCash.
Ant is an investor in the parent firms of these mobile wallets: Ascend Money and Mynt, respectively.
However, while Ant’s approach offers flexibility for Southeast Asian users, it still has challenges. While Tencent’s model focuses on its existing user base, Ant’s partnership-heavy strategy requires a balancing act between the needs of its local partners, regulatory constraints, and growth projections.
Execution requires customized solutions to meet varying preferences among partners and legal requirements across regions. But since Ant is expanding beyond consumer payments, it is working to address SME credit, cross-border ecommerce financing, and digital tools for its partners.
Building out these services demands a long-term commitment and a continual investment in infrastructural technologies such as risk and fraud control, but the reward could be well worth the effort.
As Ant balances its mission of “inclusive finance” with the realities of market-specific limitations, it faces a trade-off between expansion speed and local adaptation. The company risks slower growth by prioritising local partnerships, but this will be more sustainable compared to Tencent’s direct approach to capture overseas users.
Same goal, different strokes
Ant’s and Tencent’s strategies underscore their visions of South-east Asia’s fintech market potential. However, their methods reveal differing perspectives on achieving long-term success.
Tencent’s strategy is consistent with its approach in China, but it might face obstacles in a region where payment ecosystems are shifting toward seamless interoperability. Conversely, while Ant’s model is more focused on sustainable growth, it will require patience and a commitment to navigating local nuances as the company establishes deeper roots in the region.
Despite their different playbooks, the two companies ultimately share the same goal: leveraging Singapore’s fintech ecosystem as a springboard to Southeast Asia and potentially the world.
Their presence at this year’s SFF wasn’t just about showcasing technology. It was about showing how two giants – once almost exclusively focused on China – are redefining their identities to serve a more global audience, each with different interpretations of what sustainable growth in fintech truly means. TECH IN ASIA
The writer is the founder of Wavelet Strategy, a New York-based communications and reputation management company
