China’s Tencent wants a piece of Facebook’s pie. Here’s how it’s getting there.

Disclosure: The author was India’s marketing & strategy lead at Tencent’s WeChat between 2012-2015. This article solely reflects the opinions of the author.

The China-based company, despite dominating its home market through WeChat, has failed to crack Facebook’s messaging and social empire globally till now.

Rather than fight Facebook directly, its new strategy is to invest and partner with upstarts that are digging tunnels and sending trojans into Facebook’s castles.

How do you win this castle? Conquer it like Facebook, or go ‘wololo’ like Tencent?

Image credit: Age of Empires

Tencent recently announced a lead investment of $175m into Hike, an Indian messaging app. This is an addition to the series of investments that the Chinese internet behemoth has made in the messaging and social space globally — earlier with KakaoTalk, Kik and Snapchat, and with probably more that are unannounced.

Rather than view each of these in isolation, it is better to look at the moves as a whole, to understand what Tencent is attempting to do here, why it’s investing in these specific players, and whether it’s likely to be successful at its strategy.

The post-iPhone era

Post the emergence of iPhone in 2007, the messaging and social apps category has been on a tear, with multiple players having hundreds of millions, or even billions, of users today.

However, in terms of monetisation, only two players have been able to capture big value in this space globally — the first being Facebook. It has made money by showing relevant advertising to its billions of users, utilising its excellent demographic and user behavioural data, on top of the insane amounts of time spent by its users on the core Facebook app.

The other player has been China-based Tencent — which has made its social messaging app, WeChat, a lifestyle hub for all offline-to-online services, enabling P2P and merchant payments, and allowing micro-transaction based gaming on its platform. WeChat makes money by taking a percentage commission out of these transactions.

While both the core apps, Facebook and WeChat, have remained strong in completely distinct geographies, their parent companies have been building armies of sorts, by acquiring or taking stakes in multiple players in the category globally.

Beyond the differing approaches to monetisation, these two are now squaring off against each other, albeit with each following opposite approaches to building their messaging and social empire.

The kingdom of WeChat

The rise of challengers

Facebook’s conquest and conquer strategy, vs Tencent’s marry and build an alliance approach