This article was originally published in Chinese on Momentum Works’ Wechat platform. You can access the Chinese article here. 

A couple of days ago Momentum Works shared a blog post about the change of Lazada top management, which attracted a lot of discussions. Many friends seem to have a deep understanding of the challenges in culture, organizational structure, talent and leadership encountered by Chinese companies in exploring overseas markets and M&A integration. Especially giants like Alibaba and Tencent.

Some friends also pointed out that Tencent’s overseas investment seems to be much more successful than Ali (some people say that it is also the same in China). In fact, there are already a lot of online summaries about Tencent’s overseas investment and even Chinese investment,you can find a lot if you just search. I just recently did some research on our book about Chinese companies going overseas, and here is a brief overview of Tencent’s overseas activities and investment.

The early stage of Tencent’s overseas expansion

In the beginning, Tencent was fully confident in the internationalization of WeChat, and it also invested a lot of resources

WeChat began to internationalize in 2012, successively entered the Indian and Southeast Asian markets, and invested a lot of media resources for publicity, including placing TV commercials, inviting Messi and other stars as global spokespersons. And achieved certain results in the early days, but due to problems such as product design and version updates, the retention rate of users is not high.

At that time, few Chinese Internet companies were expanding overseas. Due to their unfamiliarity with overseas markets and the lack of experience in localization operations in various countries, it caused difficulties in the process of product localization.

In 2012-2014, competitors such as the Japanese-style Line and the easy-to-use WhatsApp quickly occupied a large market share in Southeast Asia and India. Because WeChat still regards China as its main market, Tencent has gradually missed the opportunity of internationalization, and finally began to give up its large-scale investment in WeChat internationalization in 2014. According to friends of momentum works, Tencent has spent at least hundreds of millions US$ in the past few years. Now WeChat only occupies a small market share in a few countries in Southeast Asia

Start to actively deploy overseas investment

Just like the previous strategy in China. Tencent is fully aware of the complexity of the overseas market. Considering that it will encounter many problems in various aspects during its own overseas expansion, Tencent began to expand its territory overseas by investing more.

Compared with Alibaba’s investment style of having to hold shares or mergers and acquisitions, Tencent often adopts an investment method that provides sufficient capital and technical support but does not interfere too much with internal management. This method has also achieved great success. According to Hurun’s 2019 data, Tencent’s portfolio has invested nearly 46 unicorns successfully surpassing Softbank, ranked second in the “Global Ventures”

Game investment always takes the lead

In fact, games have always been an investment area that is easily overlooked but has a high rate of return. Tencent, as a gaming giant, shows a special preference for investment in the gaming field, from acquiring the leading company of League of Legends to investing in the popular PUBG developer Blue Hole (which was renamed PUBG Corporation in 2017) in recent years. These investments have brought billion dollars in revenue, it can be said that the judgment of the trend is fast and accurate.

Let’s take a look at Tencent’s investment in these regions: Southeast Asia, India, and Europe & America.

1.Southeast Asia

Sea and Gojek invested by Tencent are well known in the region. Tencent also invested in Voyager, a fintech company in the Philippines. Tencent acquired the Thai portal Sanook and established its own video platform WeTV. And recently, Tencent acquired Ifix, a Malaysian streaming platform for strengthening regional influence.


In fact, Tencent started paying attention to the internet companies in India very early. In addition to the more well-known unicorn companies Swiggy and Ola, it also includes the B2B platform Udaan; insurance intermediary platform PolicyBazaar, medical platform Practo and news aggregation Newsdog, the investment covers all verticals in India.

It is not known whether PUBG is not on the ban list in India and is related to Tencent’s investment rather than its own expansion.

3.Europe and America

Not only is Tencent very active in emerging markets, but also in developed countries such as Europe and the United States, such as from the Swedish music platform (Apple can’t beat it) Spotify and German electric aircraft manufacturer Lilium.

It is worth noting that in the scope of global investment, the United States is Tencent’s most enthusiastic investment area. In addition to life service and financial fields, Tencent also pays more attention to AI, healthcare, B2B, and other fields in the United States.

A bright future?

The difference in investment style between Tencent and Ali in China and overseas is very obvious. Alibaba tries to integrate all the companies it has invested in into its own ecosystem. And it has stronger corporate culture characteristics

Tencent is more like a pure investor, investing everywhere, with a wide range of layouts. Tencent gives the invested company more space to develop.

After all, investing in a company is much easier than running a company and it avoids several core issues of Chinese companies overseas: mid and long term planning, resource allocation, talent selection, and product localization. In addition, it can handle the relationship with the local government better.

Of course, this also requires specific analysis of specific issues. However, if the investing company fails, the losses are limited. Without too much interference to give yourself a detached role, it is also more able to mobilize the enthusiasm of founders and companies.

Under the environment of drastic changes globally, cultivating a group of partners may be the most reliable expansion path.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].