Monopoly Tencent is even worse than copycat Tencent

Sometimes, I miss the days when Tencent needed to be a copycat to maintain its dominant industry position.

Back in those days, Tencent hadn’t completely perfected its imperial dominance, and was consolidating ground in all directions. Adopting a defensive strategy, when a product posed a threat to Tencent, it would simply copy it.

Image credit: Tech in Asia

This was terrible in that there was nowhere to go where you could avoid Tencent’s reach. But on the other hand, back in that time entrepreneurs hadn’t yet given up hope, and were still willing to challenge Tencent in the first place. Back then, Tencent was the enemy of the entire internet even as it dominated, a contradiction that exploded into the public consciousness at the turn of the decade.

In July 2010, the magazine China Computer World published a cover story titled “Fucking Tencent” that branded the company an internet public enemy. The article described grievances between Tencent and several sizable Chinese tech firms, and the issue’s cover featured Tencent’s penguin mascot bleeding from several prominent knife wounds.

“What is Tencent not doing?” Meituan CEO Wang Xing reportedly lamented just days after that article’s publication, as Tencent launched a group-buying service to compete with Meituan’s.

Personally, I feel a more objective assessment came from [Meitu founder] Cai Wensheng: “In On Computer World’s “Fucking Tencent” article, I personally think it missed the key points, neither analyzing Tencent’s advantages or weaknesses. Did it actually help competitors find weaknesses? Actually, it doesn’t make sense to blame Tencent for being a copycat. Many companies are copycats; Tencent just represents the ultimate in the copycat spirit. If we start acting as though Tencent is invincible it will only serve to scare ourselves, and won’t help at all.”

After the so-called 3Q War between Tencent and fellow web giant Qihoo, Tencent opened up a bit, and used investment funding to turn a thousand competitors into partners, turning the internet into a sort of bipolar hegemony along with Alibaba.

When Tencent was copying everything, startups persisted and attempted to do battle with Tencent. When the checkbook came out, they lost the will to resist, and gave in one after another.

As Tencent was “opening” in this fashion, its WeChat team developed a game-changing app for the mobile internet era. Through the open platform model, they created a huge ecosystem, challenging Alipay on the one hand while extending tentacles into myriad other industries using investment funding.

See: 7 years of WeChat

With a market value of US$500 billion, Tencent even surpassed Facebook, the benchmark for internet mega-success.

But being a monopoly can make you lazy, and in 2018 Tencent once again found itself on the sharp end of public opinion. Where the company had previously been criticized for doing everything (by copying anything that became popular), it was now being criticized for precisely the opposite: doing nothing at all except investing.

Pan Luan’s article “Tencent Has No Dreams” pointed out that Tencent was losing its product development capabilities and its entrepreneurial spirit. In addition to relying on WeChat, it was constantly losing in battlegrounds like cloud services and short video when Tik Tok (called Douyin in China) came along. This led, indirectly, to Tencent’s biggest internal adjustments for years.