Tencent, the owner of WeChat, has gained momentum with its growth engine. Its gaming and advertising units have experienced challenges in recent months when stricter regulations were imposed on online games. However, the report indicated that Tencent restructured its businesses last October and that they are focusing on growing its fintech and cloud units.
According to Motley Fool, Tencent unified its services into "fintech and business services" group this year. Since then, it has been labeled as the company's fastest-growing business sector.
The report indicated that the group's revenue increased by 36 percent per year reaching 26.8 billion RMB during the third quarter of 2019. It also indicated that the company's top line has also shown improvements since the first quarter of this year.
It, however, reduced the video game business from 33 percent down to 31 percent between the first two quarters of 2019. The report claimed that these values proved that Tencent's fintech and business services group may overtake its gaming unit in the near future.
The cloud revenue of Tencent also improved during the third quarter of this year. It has then been improving to 80 percent per year and has yielded 4.7 billion RMB this recent quarter. Moreover, the report said that these values indicated that although Tencent's cloud business is smaller than the tech giant Alibaba, the growth engine showed favorable momentum. It has received growing revenue by 64 percent to 9.3 billion RMB last quarter alone.
The report also hinted that Tencent's platform could still grow. China's cloud platform, in particular, has grown 72 percent in the market during the year 2017. It also said that it has accelerated to 86 percent in 2018. It was then expected that the Tencent revenue growth on its cloud business could continuously gain momentum without clashing with Alibaba.
At present, the report claimed that Tencent's WeChat Pay is tightly integrated with WeChat or otherwise known as Weixin in China. It was indicated that it garners 1.15 billion monthly active users despite being behind the AliPay values.
The report then claimed that Tencent is using WeChat Pay as its lead product for other fin-tech services such as the wealth management platform LiCaiTong. It also said that Tencent Cloud also bring s in large amounts of customer data into its analytics for merchants which also showed that the company's strategy continues to provide momentum in the market.
According to the South China Morning Post, Tencent's business continues to mature. Their strategy of boosting spending on their cloud and mobile payments such as WeChat Pay allowed the company to offset their losing gaming sector.
Moreover, the report indicated that despite the slowing Chinese economy, Tencent has expected a 55 percent growth rate in the last a quarter of 2019.
