23 July 2019

Tencent, Vanke not such an odd couple

It’s not every day that hundreds of real estate personnel head to an internet company to hear an IT executive talk but that’s exactly what happened last week. On Dec. 9, 200 China Vanke (000002.CN) employees went to the headquarters of Tencent (00700.HK) for a lecture on the internet era by the tech company’s boss, Ma Huateng {馬化騰}.

If the trip had not been reported in in-house publication Vanke Weekly, the close ties between the two Shenzhen-based companies would not have come to light. In the half-hour speech, Ma explained how Tencent cultivated QQ and WeChat to make them the country’s two most popular instant messaging tools. He went on to show how the success of Tencent’s online game business is largely based on its well-established social networking operations.

Ma could not resist comparing Tencent and its key contender, Alibaba Group. He said the key difference is that Alibaba aims to destroy traditional industries while Tencent is willing to work with offline entities. Cooperation may have been Ma’s main agenda. Why else would a rich and influential tech executive give his time and energy to inform 200 staff from a property company?

Tencent is about eight times the size of Vanke in terms of market value and although they are poles apart in business nature and valuation, they do overlap on some levels. More than 450,000 households live in Vanke properties across the country and the real estate company plans to dig deeper into this large community by offering catering, e-commerce and banking services.

Vanke has already become the largest shareholder in Huishang Bank (3698.GHK). But it still needs an IT partner like Tencent with extensive experience in online social networking and robust infrastructure to connect its scattered residents. For Tencent, Vanke’s huge database of homeowners can enrich the tech firm’s big data and cloud computing operations.

– Contact the writer at [email protected]



EJI Weekly Newsletter

Please click here to unsubscribe