Date
12 December 2017
Tencent may need to brush up its overseas plans, with Facebook also preparing a big push into internet finance. Photo: Bloomberg
Tencent may need to brush up its overseas plans, with Facebook also preparing a big push into internet finance. Photo: Bloomberg

Facebook could snag Tencent overseas ambitions

It’s an open secret that Pony Ma, founder of tech behemoth Tencent (00700.HK), aims to internationalize his popular instant messaging app Weixin this year.

On the home front, Tencent has already started to monetize the app with the launch last summer of the Weixin Payment service, which links up with users’ bank accounts to enable online transactions.

Tencent is also having some success overseas — its aggressive marketing campaigns based around celebrity spokespeople are helping it expand into markets like Thailand, Vietnam, India, Singapore and Mexico. WeChat, the international version of Weixin, has racked up more than 100 million downloads, according to the Google Play store.

But Ma may need to fast track plans, with Facebook also preparing to mount a big push into the internet finance and payment business.

According to the Financial Times, the world’s largest social network has applied to Ireland’s central bank to become an “e-money” institution. Facebook wants to start a service that would let users deposit money with Facebook and use it for payment, remittance or exchange with third parties. Migrant remittances in emerging markets would reportedly be a key target for the scheme.

Although advertising still contributes the biggest share of its top line — US$6.98 billion, or 88 percent, last year — Facebook made US$900 million from transactions via the site, mainly for in-app video game purchases. Facebook’s latest move will further diversify its income mix.

Facebook has more than 100 million users in India, and an estimated 900 million outside the United States. But competition from the social network is not Tencent’s only hurdle as it makes a move offshore.

For one, WeChat users in Hong Kong can so far only use the app as communication tool; the payment function is off-limits. The problem illustrates the difficulty in cooperating with local financial firms and getting permission from regulators.

– Contact the writer at [email protected]

SK

 

EJ Insight writer

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