Case Study of Tencent’s E-Commerce Strategy

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Case study of Tencent’s E-commerce Strategy Executive Summary Tencent’s E-commerce strategy didn’t work well. The company’s core business is QQ which is an online instant messenger. All of tencent’s other business will be rolled out base upon the QQ. They want people who use QQ can also shop online easily. So they made the strategy according to that point. They developed E-commerce websites which made no difference with Taobao and Tmall but didn’t make them to success. Why does this happen? What’s Tencent’s strategy? Introduction As Tencent announced to take 15% stake of JD.com[1], which is the largest online retailer of China, in March 2014, it also implicated the failure of Tencent’s previous e-commerce strategy. In the…show more content…
At that time, most of the Internet companies focused on one area and entrenched their positions continuously until they gained the dominance in their battlefield. Tencent grew up in this competitive environment and started from QQ which is still the core business of it today. The target users of Tencent QQ are young netizens, a crowd which are willing to try new experiences and want to express themselves. The QQ provides a platform for these young men and they quickly accepted this new thing even in rural area of China. Now Tencent QQ is the most popular instant messenger platform in China that owns more than 2 billion registered users and the number of users simultaneously online has sometimes exceeded over 200 million in 2014[2]. This basic service is for free. However, huge numbers of people on QQ delivers great amount of traffic, which also brings business opportunities to Tencent. As expected, Tencent made great effort on taking advantage of those tons of traffic from two aspects. On one side, in order to strengthen users’ loyalty and stickiness, Tencent expanded into other online service such as Qzone(online community), QQ Friends and Tencent Weibo(social network) as well as Wechat, a social mobile application with voice and text messages mainly.On the other side, to gain profit Tencent also tried many ways by providing value-added services like QQ membership(users pay monthly
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