November 1, 2018 / 12:26 PM / 17 days ago

Tencent to shift focus to industry for future growth

HONG KONG (Reuters) - Chinese internet group Tencent Holdings (0700.HK) plans to expand into providing services to industries such as healthcare and connected cars in a move to promote growth beyond its mainstay consumer business.

Logo of Tencent is displayed at a news conference in Hong Kong, China March 22, 2017. REUTERS/Tyrone Siu

Tencent, China’s largest social media and gaming company that operates the WeChat messenger app, in September announced a major restructuring aimed at moving from being a consumer business towards one catering to industry too.

Dowson Tong, president of Tencent’s newly formed Cloud and Smart Industries Group, told the company’s annual global partners conference that the new group would focus on artificial intelligence, cloud services, big data and security.

“If the development of internet is said to have centred on consumers over the past 20 years, it will probably focus on business and industry over the next 20 years,” Tong said at the livecast event in Nanjing.

Tencent’s restructuring comes as the company’s main business of gaming and online services grew at a slower pace, hit by regulatory hurdles this year.

The restructuring created the industry-facing group led by Tong, who had spearheaded Tencent’s cloud business. The company also consolidated three content-related businesses into one.

Tong said Tencent planned to continue to improve its traditional stronghold of consumer internet services, while developing new industry-facing services focussing on sectors such as healthcare, transportation, education, and retail.

Tencent vice-president Zhong Xiangping said at the conference that the company’s autonomous driving business was a software and services provider. It also provides cloud services to business partners in connected cars, an area where Tencent has obtained road testing licences in Shenzhen and Beijing, Zhong said.

Lin Songtao, vice president in charge of Tencent’s content platforms, said the company had set aside a 5 billion yuan ($720.13 million) fund to encourage creative content for Tencent’s various platforms that include WeChat and Spotify-like music apps.

Lin also said launched Yoo, a new short-form video app that will focus on content of 1-3 minutes, which he said is increasingly the most popular format of media consumption.

Reporting by Sijia Jiang. Editing by Jane Merriman

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