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A Penguin Who Changed China: Tencent.com

Free services and entertainment are two of the most important things Chinese people look for on the web and there is no Internet company that knows Chinese netizens better than Tencent.com. In the past 12 years, Tencent has developed China’s most popular instant messenger, built up China’s largest online game platform, and created China’s hottest group messaging app. Even in the smallest village in China, you will find Tencent’s most successful product, the penguin-iconned Tencent QQ messenger, connecting everyone to people they love. 

Tencent’s strategy is “modify and occupy”. Instead of developing original software and services, Tencent chooses to “modify” popular things and add more functions Chinese people like. Most importantly, they are almost all free. Just take Tencent’s QQ as an example. It is very similar to Skype but includes more free services. Only paid premium users can have group video calling on Skype. However Tencent QQ supports 20 people video calling with no charge. Tencent QQ also supports offline file transfer, which is very convenient for business users. Compared to Windows Live Messenger, Tencent QQ also does a much better job on messenger group functions. You can send emails, share files and live chat with all your group members, and each group can include 500 people. For picture and movie sharing fans, Tencent QQ is the best free screenshot and video capture tool. Tencent QQ provides more services than most Chinese internet users can possibly want – and all they need to pay is their Internet costs.

With more than 700 million user accounts world wide, Tencent QQ is a huge user group that brings Tencent.com tremendous business opportunities and bargaining power. Using your Tencent QQ log-in information, you can join all kinds of free Tencent services, such as QQ Games, QQ Zone (like MySpace), Tencent Weibo (like Twitter), QQ mail, Mobile QQ, Weixin (like Talkbox), etc. Every time Tencent launches a new product, it promotes it to its captive audience of QQ users.

This market domination makes it hard for start-up companies to develop loyal users no matter how innovative they are. The “Tencent ceiling” has become a serious topic in Chinese Internet market. One QQ user put it this way:” If Facebook was invented in China, we will be using Tencent Bookface now.”

Although people disagree with Tencent’s business strategy, no one can argue with the efficiency and convenience of Tencent’s products. Tencent knows its customers and Chinese society very well: Chinese people prefer to have free average service than paid good service, and have huge enthusiasm for “time killers” like chatting, games and movies. All of these services must be simple to use.

Due to restrictions and censorship in the Chinese Internet market, global giants like Google and Yahoo are disadvantaged in comparison to local companies. It’s also really hard for American companies to truly understand what Chinese people want and need. It’s much easier to get money from advertisements in China than actual product sales.

The hard truth is that in China, innovation is not a selling point. Your market advantage is a great sales and marketing strategy. Tencent’s success secret is very simple: Designing products that perfectly match Chinese netizens’ expectations. With a “penguin” in every Chinese computer, Tencent is waddling toward complete market domination.