How China’s Tencent avoided an antitrust surge, so far.
It’s ignoring the enormous power imbalance between Tencent and the many satellite companies in its orbit. Colin Huang, founder of Pinduoduo, suggested that in a 2018 interview, in which he criticized WeChat for refusing to help censor accusations of counterfeiting on its shopping platform.
“Tencent will not die when Pinduoduo dies,” he said, “because he has tens of thousands of sons. “
No matter how decent or humble Tencent may act, it’s a giant conglomerate with $ 24 billion in profits last year and spending a large chunk of it on investments. It picks winners and losers, but the winners won’t always be the best, which hurts innovation and efficiency.
It limits user access to other products and services. Its WeChat app does not allow users to share links for merchandise on Alibaba’s Taobao online marketplace or for short videos on Douyin, TikTok’s Chinese sister company. (Other platforms block Tencent’s services.) When three social messaging apps launched in January 2019, they were immediately blocked on WeChat.
Douyin’s parent, ByteDance, shows the possibilities when a business goes it alone. In its early days, ByteDance founder Zhang Yiming took a small investment from Tencent to fend off the company, but resisted closer ties. Responding to rumors that Tencent would invest in ByteDance in 2016, Mr. Zhang wrote that he had not started ByteDance to become an employee of Tencent. He posted the lyrics to the song “Go big or go home.”
ByteDance’s independence paid off. It is now valued at nearly $ 400 billion with a few hugely popular online content apps including TikTok, the first Chinese internet product that has become a global phenomenon.
Tencent doesn’t just run the industry. He has also long tried to get closer to the government. Compared to sometimes challenge Alibaba, Tencent has long publicly emphasized its willingness to fully comply with rules and regulations.
“Now I think it’s important for us to understand even more what the government is concerned about, what the society is concerned about, and to be even more compliant,” Tencent President Martin Lau said during a call for results in January. Tencent executives used the word “compliant” six times in the appeal.