Summary Bullets:
• Tencent is looking to expand globally to increase revenues. It is targeting a variety of industries in South-East Asia and the Middle East & Africa.
• As a software-only company, Tencent is less susceptible to western regulation potentially curtailing its activities.
Tencent’s recent Analyst Day and subsequent Ecosystem Summit this month was the vehicle used by the company to announce it is looking beyond China in earnest to expand and deploy its cloud and software solutions. Two regions were highlighted as key expansion areas: South-East Asia ex-China and Middle East & Africa.
Tencent states its cloud business has grown significantly since 2021 with over 10,000 overseas customers in 30 industries across 80+ markets. Year-on-year, the Asia-Pacific region business for Tencent cloud grew more than 50%, and business from the MEA region grew 85%.
For Africa, Tencent is advertising itself as a digital inclusion facilitator, incubating African entrepreneurship. Its recent launch of Orange MEA’s ‘Max it,’ an app that mimics the Tencent Weixin super app with over one billion users, is a sign that the company is looking to replicate and grow its business abroad in partnership with willing telcos. For Orange MEA, the partnership with Tencent Cloud is a step toward offering relevant services to both Orange and non-Orange subscriber businesses and end users, with ‘Max it’ hosting mini apps – such as subscription management, e-wallet, and e-commerce – that will simplify business, customer, and lifestyle functions by consolidating them on one app platform. The service is currently rolled out to six markets and will be deployed to other countries including Jordan where Orange operates.
Tencent is also setting up a cloud region in Saudi Arabia in 2025 to add to the 21 it already has, ensuring closer presence to the edge for businesses and companies in the Middle East. It already conducts business with some players there: The UAE ‘Tamm’ e-government platform consolidates over 700 services, built on the Tencent Cloud’s mini-program platform; Abu Dhabi’s department of culture and tourism digital ambassador is powered by WeChat, hosted on Tencent Cloud; and Mobily, which tapped Tencent Cloud to launch ‘Go Saudi’ to revolutionize the Saudi digital landscape to strategically diversify its enterprise business solutions to AI, cloud, and big data.
Beyond telcos, Tencent is heavily penetrated in the Chinese electric vehicle industry and is now wooing foreign electric vehicle manufacturers to conduct business in China with Tencent Cloud technology. Tencent’s ambitions cover a wide range of industries, including healthcare, gaming, banking, manufacturing, and mining. Thus far, Tencent has assisted AstraZeneca, Mercedes-Benz, Toyota, and Walmart to expand into China.
As Tencent is a software company, it is unclear how, when, or if the US ire that has targeted Huawei hardware in recent times will fall on Tencent. Certainly, the company feels it is less vulnerable and has already expanded by establishing cloud regions to Silicon Valley, California (US); Virginia (US); and Frankfurt (Germany) – Huawei’s cloud regions in Europe and North America are in Dublin (Ireland); Istanbul (Turkey); and Mexico City (Mexico). Tencent has been somewhat strategic in its expansion thus far by quietly embedding itself in the tech ecosystems of governments and companies before any unfavorable legislation or regulation can hinder its international growth prospects.