tencentpeterzheng

Peter Zheng, Vice President at Tencent

 

It is estimated that up to 5 billion yuan (more than $800 mn) will go to third-party developers by the end of this year, Peter Zheng, vice president of Tencent, disclosed on stage at TechCrunch Shanghai. He claims the open platform Tencent operates is the largest in China that has over 400,000 registered apps and 800, 000 developers on the platform. 90% of paying apps have received revenues.

Tencent has been notorious for copying Internet products or features. The company broke silence not very long ago and started touting innovations the company had created. According to Mr. Zheng, Tencent has filed over 7500 patents in China and has been granted some 1250 patents outside the country.

QQ Farm, a game developed by Tencent in 2009, was a clone of Happy Farm which was developed by a Shanghai-based team in 2008. But Tencent did it differently that, instead of following the original which was for users to mange virtual farms, changed it into a social game with features for users to interact with their QQ IM contacts; for instance, your QQ friends could steal fruits in your farm when you didn’t manage to harvest them in time. The mechanism largely boosted user activity that the game had 320 million monthly active users at peak. By leverage the high user activity, the company made tons of money from virtual item sales. Whilst Happy Farm gradually lost traction. Renren, the Chinese social network known as a Facebook clone, decided to remove it earlier this year.

To be fair, Chinese Internet companies including Tencent created a lot of consumer-facing paying products or services. Zou Shenglong, CEO of download service Xunlei, believes premium subscription created and optimized by Tencent is still one of the best monetization approaches. A majority of Chinese Internet services, from Weibo to online video services, have adopted the Tencent’s model.

Tencent is famous for creating virtual offerings and selling them as packages for subscribing or separately. QQ Coin, the virtual currency used for any transactions across Tencent properties, makes purchases easy. To this day virtual avatar on QQ IM is still popular with users and sells well. It was one of the first that helped the company generate some revenue. Others include virtual items for decorating Q-zone, a social blogging and sharing service which is headed by Mr. Zheng, or used in online games.  Q-zone can be the largest social network in China in terms of active users — it had 623.3 million active users as of Q3 2013.

Other popular products or features created by Tencent Mr. Zheng also mentioned include,

  1. QQ Group. It’s a Web-based grouping chatting feature. It enables sharing files of various formats, video chat, creating polls, sharing songs from QQ Music, etc.
  2. Shaking-to-do-everything capability with WeChat. WeChat got much traction in China when the shaking-to-find-people-nearby feature was released. It turned out users would love to see strangers nearby or even start chatting with them. It was reported that feature was even used by prostitutes in some southern cities to find customers.