In response to a local report exposing the company’s messy ecommerce business, Tencent last week confirmed the long-rumored merger of 51buy.com and buy.qq.com, saying the two efforts would be merged at an appropriate time. It didn’t explicitly say when though.
Tencent finally get started streamlining its confusing and complicated ecommerce business lines, better sooner before it’s too late.
Pony Ma recently admitted that the company’s e-commerce arm was in trouble. Buy.qq.com as Tencent’s own-child saw no uptick trend since its inception while the adopted 51buy’s performance was relatively much more cheering. The integration might be a solution to its fragmented e-commerce business since both are B2C services.
According to iResearch, in Q2 2012, Tmall and 360buy took the top 1 and top 2 slots, with 57.1% and 20.1% of the B2C market share respectively. As for Tencent, 4%, the first time it surpassed Amazon China (which speaks to how terrible Amazon is in China).
With trillions users and big money, why Tencent ecommerce biz isn’t faring well?
It seems that the management teams integration didn’t pan out well after the 51buy acquisition. Different teams focused only on their own business without enough communication and cooperation.
Pony Ma also confessed lately that corporate culture dilution, management friction, resource allocating, coordination among different divisions as well as control of new products were really big troubles now as the firm bought in a bevy of ecommerce startups.
As Tencent’s SVP Wu Xiaoguang put it, the keyword for Tencent ecomm group in 2012 is consolidation. But it doesn’t seem to work well. And there isn’t much time left as Taobao/TMall are striding fast and360buy and Suning are catching up quickly.
screenshot of buy.qq.com homepage