The Development of TenCent by Yoyo Yang Yang
Introduction
On December 28, 2004 evening, China economical year character each award item makes known by the reputation for Chinese economic world Oscar prize CCTV2004. Ma Huateng the sudden appearance of a new force clinches the year new sharp prize. Perhaps in China, has very many people not to know Ma Huateng is a kind of person, but the very few some people did not know that chats tool – QQ take the lovable small penguin image as representative.
Ma Huateng founded Ten cent company is closes right up against this to chat the tool to change 1/13 Chinese’s communication custom, and has obtained the widespread international influence. On in the last week by US “Time” weekly and wired news net (CNN) evaluation in 2004 in the global most influential 25 business circle public figure, Ma Huateng also qualifies.
(Source http://finance.sina.com.cn/wealthperson/2004-06-06/507.html（新浪科技）
In technical fast development present, the network already is accepted by everybody. Among this, Tencent is a big winner without fail. It’s the most early and biggest Internet immediate correspondence software developer in China. Since has established for 7 years, Tencent always pursue the eximious technology and the steady development continuously. They have established QQ, QQ.com, the QQ game, PaiPai network and many network platforms, has separately formed the scale huge network community. There into, the QQ influence is biggest, it preponderate over 5.315 hundred million.
On June 3, 2006, Tencent company to announce that, demonstrated according to the newest statistical data, Tencent QQ to be highest at the same time the online user to break through 20,000,000, since this has been continues in, 2005 QQ to be highest at the same time online breaks through 10,000,000 simultaneously the online user once more to obtain the historical breakthrough..
(Source:http://www.tencent.com/about/mo_dt.shtml?/about/2006/20060603.shtml)
Why does QQ such receive welcome? A very important reason is QQ is the first immediate communication facilities. The network is one kind of dissemination extremely fast medium, so through network, more and more person knows QQ, and uses QQ to be familiar with QQ. In this foundation, QQ’s function is complete, applies simply, exchanges conveniently. Is satisfying the user individuality demonstration and the entertainment service aspect, Tencent has extremely successful hypothesized vivid product QQ show, QQ pet and QQ Game, QQ Music/Radio/Live TV and so on. Tencent has satisfied the different crowd to the network different need, so these friendly products can receive everybody welcome.
(Source:http://www.tencent.com/about/about.shtml)
Actually, in 1998, Ten cent is only a small company which is value-added service software and the system integration, the owner is less than six young people. All service profit is meager. In 1999 they made a set of immediate communications system, bid for Guangdong the telecommunication, afterwards delivered other several places, but they didn’t accept. Then put in own website, as a free service for user. This is the OICQ embryonic form.
At present China’s three big gateways website is: Sina, 163.Sohu.In which does not certainly have Tencent. But T favors very much by the professional, T the first quarter performance extremely is this year outstanding, already surpassed the net to be easy. The wealth newspaper demonstrated that, in this first quarter, the T gross income is 645,300,000 RMB(80,300,000 US dollars), grew 114.8% compared to the same time last year; In the time gains for the RMB249,700,000 Yuan (31,100,000 US dollars), grew 157.5% compared to the same time last year .
(Source:http://www.software100.cn/cms/archive/2006/06/22/463.html).
Tencent is the strong point public immediate communication domain, Tencent although has occupied 60% many market share, MSN occupies the market share and Yahoo! which 20% do not arrive passes occupies 10% many market share. Therefore said Tencent also has the big development space.
(Source: http://digi.it.sohu.com/20060313/n242258502.shtml)
On 17th.Jun, Ten cent came into the Hong Kong market normally, shares code is 0700. After, the stock still going well., from the stock price 3.70 dollars rises to 4.45 dollars, the increase scope reaches 20%, the transaction is extremely activities, had finalized a deal 3.012 hundred million. (Source: http://www.tencent.com/)
The main objective of this paper is although Tencent is still developing in unceasingly, but it has so many problems by itself. Especially immediate software update unceasingly and developing at present, it is up against the competitors also increase day by day, who will exceed Tencnet and become the focal point, everybody to pay attention.
REVIEW OF LITERATURE
Tencent’s Problems
Along with Ten cent daily strength, more and more questions also along with it appearance:
The firstly, many trash functions and high price. Usually, when we use QQ, we may discover, many functions are all not very commonly used. Actually this point should be Ten cent has satisfy the user needs, take user as key strategy; but many commonly used functions also are the charges. This point let many net friends feel the disaffection.
Second. QQ rank system. While the nation summoned uses electricity frugal, QQ has promoted the QQ rank. The CCTV news had already reported leap news QQ to hang the level waste electric power resources the matter, but so far Ten cent not to promote the concrete measure to improve this kind of condition.
Third, takes the big memory. Chats immediately as one the tool, the function which QQ provides is more and more rich, although some functions are not commonly used, but takes the very big memory actually, installs the document from not to be at first many to 1M to present 19M, after installment document also expand more than 90 M. (source: http://www.itdoor.net/pages/27,16395,1,1060249766.htm)
Actually Ten cent also has very many problems, I did not explain one by one.
Above these problems, it’s obviously. If does not solve these problems, they will difficult to stand for a long time on this domain.
Tencent with AOL
Overseas by AOL (American online – time Warner, serves under somebody’s banner has ICQ and the AIM two large-scale systems) is representative, domestic leaps the news take the QQ master Shenzhen as representative. However along with free immediate communication unceasing development, immediate communication facilities like Microsoft’s msn, net easy froth, UC, ICQ, Yahoo Messenger, Microsoft.NET Messenger、Instant Messenger of AOL and so on, Emerges one after another incessantly, they in abundance initiate the attack to the QQ monopoly status.
Facing the competition, Ten cent did not worry, because the immediate communication market is extremely special, is not sells a software product to be possible simply to settle. On the one hand the product, the service, the operation three any the vacancy, all is unable to satisfy the user the demand.
(Source:http://www.donews.com/Content/200603/5d1c9d97135444fd8e11b1542e96bcf1.shtm)
Tencent’s Crisis
Ten cent in domestic operation several years, this aspect superiority already highlighted. But other new products from the construction operation, the service system, have the very long section of roads to have to walk. Talks about here, this young CEO lifts a heavy weight as if light said: “we welcome in the strategy to compete, but we take the competitor extremely in the tactic. We can make very many concrete analyses, compared with respective fit and unfit quality weak points and strong points, excavation user’s latent demand.”
(Source:http://www.panpan.org/2007/zhanzhangwangzhi/wangzhanyunying/6.htm)
In fact, facing the intense market competition leapt the news already to adopt the corresponding strategy. Little while ago, Ten cent company’s to hold an activity in Beijing, and celebrated them just to promote a year QQ game to break through 1,000,000 users. But QQ game extrusion is precisely Ten cent excavation user’s to meet outside immediate communication entertainment demand to an intense market competition key point. Next year will Ten cent continue to strengthen the network game service, and will join into auction online market, thus will cause to Ten cent the overall income to have the enhancement. In the network game service, will Ten cent plan next each month to promote a small section online game at least; every three months promote a section pilot-scale game; every nine months promote a section omni-directional multi-role game, but these game software, will Ten cent voluntarily to develop.
Some expert analyst believed that, the network game market and the past immediate communication market could not place on a par. At present Ten cent not to have the customer channel monopolizing superiority, at present l Ten cent the network to swim the product not to have the unique superiority and the variation. Also some people believed that, the game with QQ relates in the superiority can together big. Facing these questions, the horse has invited ridicule, he said: “every time enters a new market domain, I all can ask the oneself three questions, first, the new domain is we excels; Second, if we do not do, the user can suffer any type the loss; Third, if has done, how competitive advantage.”
(Source: http://www.panpan.org/2007/zhanzhangwangzhi/wangzhanyunying/6.htm)
In my opinion , Ten cent is able to emerge victorious in every battle because it’s in net communication wasn’t popular in China forepart, by unique superiority, hold the lead station, through update and develop unceasingly, cause the QQ series go deep into people’s heart , it’s difficult to exceed. However impossible is nothing!
CASE STUDY EXAMPLE
I thought Amazon has the similar situation with Tencent. Amazon net the bookstore had been established in 1995 is whole world electronic commerce succeeds representative. From 1999, the Amazon website started to expand sales the product class. Now besides the books, film and television product, the Amazon also at the same time on-line sells the clothing, the present, the child toy, the domestic electric appliances and so on more than 20 class commodities. In network shopping development rapid time, why Amazon cans can get the biggest success. I will through the Amazon case study to suggest and compare with Tencent.
At present, on all net stores, the Amazon is the best. It is not the magician, it can achieve Tencent also can achieve. The Amazon success is not merely because it acts swiftly to get there first, more essential is it nearly perfect online sale art. Amazon has redefined the retail trade. According to the analysis, in 1998 the surfer population will surpass 100,000,000, in 2002 increases 320,000,000. More than half user indicated this year must attempt on a bottom wire the shopping. In 1998 on the net the store sale will be 7,800,000,000 US dollars, will amount to 108,000,000,000 US dollars to 2003, accounted for entire American all retail turnovers 6%.
(Source: http://www.21training.org/cy/5_anli/amazon.htm)
How so long as you did visit its stand and order a book on-line may see with one’s own eyes they are do. The Amazon has made many correct decisions, but the successful secret is: Responsible. The Amazon knew the sense of responsibility is lets on the net the purchaser feel felt relieved key. On the net the shopping is different with live shopping, customer can’t contact merchandise directly, also can’t communicate with others directly; they only can sends an order form to the Cyber space. The attraction customer is lets them from your here ordering secret feel you are truly paying attention to all in there, on the net the shopping cannot let them be disappointed. This is precisely the Amazon makes the best place. Below enumerates the experience which some Amazon succeed, if you also want to succeed, might as well imitates them.
1. Immediate action.
The Amazon surfer management compares other competitors to have early. Not only its superiority lay in has established a customer information bank, how moreover lay in the academic society to sell on-line. When other competitor just stepped on the accelerator, the Amazon already entered the accelerating regime.
2. Low price strategy.
In Amazon, most books have discount. Certainly also has other minority several bookstore price to be cheaper, but the price difference is very small. Cheapest is not most important, more importantly lets the customer feel does not need to consider the price. Because the customer knew, found a book in here, not impossible to find cheap very many same one in other place. Elsewhere therefore the customer is even disinclined to go to look again.
3. Change.
The Amazon main page has some changes every day, but is not in order to demonstrate more products is in order to indicate them to the new trend attention. Has the change stand certainly is every day a careful management stand. Certainly, suggested your website does not have to change very many, so long as replaced recommends the goods to suffice especially.
4. Feedback–Sends e-mail to the customer.
The Amazon after receives the customer order form to be able to give immediately sends the e-mail confirmation. After mails out the customer to subscribe the goods, then sends e-mail, and supplements the goods the recording number. The customer likes this way, because did this eliminated on the net the shopping uncertainty.
5. Special service.
The Amazon provides many kinds of special services, the good customer service is expands on the net the sales volume key. The advertisement possibly can let the people visit your stand, but the good prestige only then lets the people go shopping
(Source:http://www.webpromote.com.cn/article/2000/06/05/20000605-4.htm)
Amazon also faced with a basic challenge—Competitor.
EBay starts to the Amazon superiority service challenge. Although eBay has already defeated Amazon in the auction domain, but the company does not satisfy this, already decided on the other day continues to the Amazon superiority domain march.
(Source:http://www0.ccidnet.com/news/ebuss/2001/08/10/54_52227.html)
Amazon and eBay all have the good prestige and the operation pattern. In long-term management process, accumulated the massive data, include commodity information, customer information and so on. Except EBay, The A competitor also has Yahoo and other shopping websites.
(Source: http://spaces.msn.com/kangihao/blog/cns!15de31b464b0806e!265/)
RECOMMENDATIONS
Through Amazon’s case study, I want expatiate my owe opinions and give some suggestions to Tencent.
1. QQ is earliest chats immediately software, this is its superiority, this point very are also similar with Amazon. Tencent compares to other chat software one step to accepted by the net friends
2. QQ is the free registration; this point is accepted by everybody. So long as downloads the QQ software, then does not need a cent money, the net friend then may use QQ to carry on the communication in the network. But along with Tencent development, Tencent uses the different commercial method to charge the fee. For instance: The net friend wants to have a number QQ number, must use the handset to register or the payment. Also has some other services also is the charge, this point I hoped Tencent may have the change.
3. The Tencent changed is everybody can see, Developed from a small company to now, Tencent only use several years. I think this the unceasing change and the renewal am cannot separate. Tencent has held the net friend psychology and the need, has promoted the different QQ series. Now QQ not only is a pronoun which chats, it does also include many types.
4. QQ and the net friend between communications are very close, often can make some feedbacks. Through net friend’s reply, Tencent may understand own insufficiency and the net friend idea.
5. The Tencent service involves very many aspects, Game, Principal part, Broadcast, this is a very intelligent procedure. May let net friend more understanding Tencent through the different service, and obtains the benefit.
6. Repeatedly endures the QQ number burglary behavior in view of the net on which continues, Tencent of directors president concurrently CEO Ma Huateng to indicate, the company will take the action, again will fight with the fists strikes QQ to rob the number phenomenon, will not remove the use legal instrument the possibility Auction. (Source: http://ibdaily.mofcom.gov.cn/show.asp?id=127392)I think it’s good, because its can protects net friend’s rights and interests.
Contrasts Amazon, Tencent has the superiority now, because its service is broad, the type are many, most main one was compares other competitors to be very already familiar with by the net friends.
CONCLUSION
Since after continuously competition, Tencent already occupied the important position in this domain. But along with network market endless saturation, how long can Tencent the fast development? QQ should use the existing capital to expand more various service and solve own problem. Although QQ indisputably is occupying its status as before, but same year that kind of surfer was the fiery scene which on QQ chatted disappears.
The people need QQ, also need more richly colorful network life. From this point, who can provide the more richly colorful network mode of life, then who can be successful in the immediate communication market. Tencent success besides itself strength, more because receives the net friends to support, Therefore T should not in have the unreasonable charge. The company and the consumer are one kind of mutual relations, only then let the consumer think satisfaction; Tencent can have the long-time development.
Now, I thought SWOT to analyze Tencent:
S: The network is mature, market share, enterprise formation early, brand superiority
W: The development form is unitary, has not been able to guide the new thingies the development space
O: The network fast development has brought the infinite opportunity
T: Substitute threat, network security, competition. . .
Although Tencent has question many, but in light of the present circumstances, still is an eldest child who China chats immediately. So long as maintains the enterprise culture in the present foundation, enhances unceasingly, innovates unceasingly, the immediate solution appears question, then Tencent can have a better development. The network market shift is extremely quick, only then caters to this market through own change, Tencent also same, if does not change can eliminate.
I hope Tencent can be able to promote a more effective innovation, thus long station which stands in this domain steadier.
BIBLIOGRAPHY
l http://finance.sina.com.cn/wealthperson/2004-06-06/507.html（新浪科技）
l http://www.tencent.com/about/mo_dt.shtml?/about/2006/20060603.shtml
l http://www.tencent.com/about/about.shtml
l http://www.tencent.com/
l http://www.itdoor.net/pages/27,16395,1,1060249766.htm
l http://www.donews.com/Content/200603/5d1c9d97135444fd8e11b1542e96bcf1.shtm
l http://www.panpan.org/2007/zhanzhangwangzhi/wangzhanyunying/6.htm
l http://www.21training.org/cy/5_anli/amazon.htm
l http://www.webpromote.com.cn/article/2000/06/05/20000605-4.htm
l http://www0.ccidnet.com/news/ebuss/2001/08/10/54_52227.html
l http://spaces.msn.com/kangihao/blog/cns!15de31b464b0806e!265/
l http://www.software100.cn/cms/archive/2006/06/22/463.html
l http://digi.it.sohu.com/20060313/n242258502.shtml
l 《计算机世界》，1999年4月
l 《他把书店搬上网》，方兴东
l 《网上公司并购风起》，互联网周刊
l 在线国际商报
One Response to “The Development of TenCent by Yoyo Yang Yang”
Don't be shy, leave a comment...
You must be logged in to post a comment.
August 30th, 2006 at 10:53 pm
It is good to see students writing on China’s Web developement , especially one on tencent. It is right to say that Tencent will be a real force to reckon with, even on a global scale.
As for the paper, I wonder why Amazon is used as a case example instead of similar ICQ companies for comparision.
Overall, it is still an interesting study of what Tencent can do in future to further win the race in China.