QQ (Tencent) introduced the “One-click Comment” function and managed to explored new sources of traffic. Alipay introduced the “Comment after Payment” function. WeChat (Tencent) introduced the Notification Subscription and Industry Assistant functions to support its mini-apps. TikTok launched a dedicated page for mini-apps, and at the same time introduced its Karaoke mini-app, further complementing ByteDance mini-program ecosystem.

Meituan, as a late-comer, also launched its own mini-program platform in October this year, further heating up the competition.

According to anlaytics company Aladdin’s October ranking of mini-apps, distribution of top mini-programs by category witnessed a significant change.

Online shopping mini-programs have reclaimed the top places on the list. Life services mini-programs showed outstanding performance while mini-apps in the video and travel categories dropped significantly in terms of ranking.

In the vertical markets, the Golden Week long holiday boosted the demand for portable power bank, leading to a significant climb on the list of phone charging related mini-apps.

The distribution by category of the newcomers on the list showed an apparent trend of pre-heating of the Double Eleven Festival 2019: the number of new or updated online shopping mini-apps increased significantly.

The monthly active users of WeChat (Weixin) reached 1,133 million during the second quarter of 2019, up 7% year-on-year according to Tencent’s announced financial results. Smart device MAU of QQ was 707 million.

WeChat Mini Programs ecosystem has become more vibrant, attracting more developers and service providers in Q2 2019. The number of medium-to-long-tail Mini Programs has more than doubled year-on-year while the nature of Mini Programs has become more diversified.

For example, content Mini Programs allow users to conveniently create, upload and share interesting videos, music, and news within WeChat. More than a dozen content Mini Programs have attained over 1 million DAU.

Key user metrics including time spent per user, daily messages and video uploads sustained solid year-on-year growth during the second quarter.

QQ active users in Q2 2019

QQ MAU grew slightly by 0.6% to 807.9 million in Q2 2019 while mobile QQ reached 706.7 million, down 0.3%. And, smart device MAU of social networking app QZone grew by 2% to 553.5 million.

Tencent launched a major version upgrade for Mobile QQ, which contributed to an increase in the number of daily messages and strengthened user engagement. To enrich the core chat experience, Tencent enhanced functionalities for messages in voice and video. To broaden user connections, Tencent upgraded algorithms to recommend new friends based on common interests and shared contacts.

Tencent also introduced QQ Mini Programs, with entertainment and games-related Mini Programs attaining particular popularity among QQ users.

Tencent’s social advertising revenues were RMB12.0 billion in Q2 2019, up 28% year-on-year, driven by increased inventories and impressions for products such as WeChat Moments and QQ KanDian. See Tencent performance summary here.

The monthly active users of China mobile internet dropped to 1.136 billion in June 2019 from 1.138 billion in March 2019 according to data from QuestMobile.

How Becky built its e-commerce success on WeChat

Tencent’s total revenues in Q1 2019 were RMB85,465 million (USD12,693 million), an increase of 16% over the first quarter of 2018 according to Tencent’s announced financial results.

Its revenues from VAS increased by 4% to RMB48,974 million for the first quarter of 2019 on a year-on-year basis. Online games revenues were RMB28,513 million, broadly stable compared to the first quarter of 2018. Social networks revenues grew by 13% to RMB20,461 million.

Revenues from FinTech and Business Services increased by 44% to RMB21,789 million for Q1 2019 on a year-on-year basis. The increase was mainly driven by greater revenues from its commercial payment and cloud services.

Revenues from online advertising increased by 25% to RMB13,377 million for the first quarter of 2019 on a year-on-year basis. Social and other advertising revenues increased by 34% to RMB9,898 million, mainly due to the increase in advertising revenues derived from WeChat Moments, Mini-Programs and QQ KanDian.

Mr. Ma Huateng, Chairman and CEO of Tencent, said,

In the first quarter of 2019, we sustained healthy user engagement across our key platforms, with notable growth in the number of short videos uploaded and shared by users on QQ and WeChat.

We are invigorating our game business with popular releases such as Perfect World Mobile in China, while PUBG MOBILE is growing internationally.

Our payment, other FinTech services and cloud business, while still at an early stage of expansion, are now generating substantial revenues, and we are consequently disclosing their results in our new FinTech and Business Services segment, demonstrating our success in organically incubating services with long-term growth potential.

Its operating profit was RMB36,742 million (USD5,457 million), an increase of 20% YoY. Operating margin increased to 43% from 42% last year. Profit for the period was RMB27,856 million (USD4,137 million), an increase of 16% YoY. Net margin was flat at 33%.

Profit attributable to equity holders of the Company for the quarter was RMB27,210 million (USD4,041 million), an increase of 17% YoY.

Basic earnings per share were RMB2.877. Diluted earnings per share were RMB2.844. On a non-GAAP2 basis, which excludes certain non-cash items and certain impact of M&A transactions:

• Operating profit was RMB28,470 million (USD4,228 million), an increase of 13% YoY. Operating margin decreased to 33% from 34% last year.
• Profit for the period was RMB21,673 million (USD3,219 million), an increase of 13% YoY. Net margin decreased to 25% from 26% last year.
• Profit attributable to equity holders of the Company for the period was RMB20,930 million (USD3,108 million), an increase of 14% YoY.
• Basic earnings per share were RMB2.213. Diluted earnings per share were RMB2.187.

Social Media

During the first quarter of 2019, combined MAU of Weixin and WeChat was 1,112 million, up 6.9% year-on-year.

Smart device MAU of QQ slightly increased year-on-year and exceeded 700 million in the first quarter. Young users became more engaged on the QQ platform and their MAU grew by a double-digit rate year-on-year.

China Internet users are increasingly utilizing WeChat and QQ’s in-app camera functions to record short videos, which they then share in one-to-one chats, group chats, and timeline formats. Users now upload hundreds of millions of videos each day to Tencent’s communications and social platforms, which Tencent believe are the leading venues in China for uploading and viewing such user-created videos.

Tencent launched Mobile QQ Version 8.0 with engaging features such as QQ Mini Programs and KuoLie, which recommends new friends to young QQ users based on similar interests.

In WeChat, Tencent enabled users to share information, products and services for different vertical categories of Mini Programs within their chat groups, facilitating activities such as group buying for local communities, and the active user base for non-game Mini-Programs continued to grow at a healthy rate.

Online Video

Tencent Video subscriptions increased 43% year-on-year to 89.0 million, driven by popular self-commissioned IP content, such as Candle in the Tomb Season 3; Heaven Sword, Dragon Sabre (based on the popular martial arts novel by Louis Cha); and The Land of Warriors Season 2.

Tencent Video subscription counts were broadly stable sequentially due to delays in airing certain drama series, which might otherwise have contributed more to subscriber growth.

To further engage with video viewers, WeiShi launched a new feature for Produce 101 Season 2, enabling users to vote for contestants and share related short videos with their WeChat and QQ friends.

Continue to read Q1 summary on JD and Alibaba.

Half the top ten apps that generated the most revenues from the Apple Store were from Chinese tech companies. Notably, all those apps turned out to provide some sorts of subscription services for video or music streaming and social interactions. 

Tencent-affiliated Tencent Video took the second position with a remarkable US$490.2 million in revenue. Baidu-backed iQiyi and Kwai (Kuaishou) ranked fourth and fifth with a revenue of US$420.5 million and US$264 million, respectively. Alibaba’s Youku and Tencent’s QQ made it up to the eighth and ninth places with a revenue of US$192.9 million and US$159.7 million, respectively.

Wondering the top mobile apps in China in Q3 2018?

Tencent saw its first decline in profit since Q3 2005. WeChat total MAUs grew about 10% to 1,057.7 million. Overall, both QQ and QZone saw a decrease in their MAUs in this quarter.

The first decline in profit since Q3 2005

Tencent’s total revenues were RMB73,675 million (USD11,135 million), an increase of 30% over Q2 2017 (“YoY”), driven primarily by payment-related services, digital content subscriptions and sales, social and others advertising, and smartphone games.

Its operating profit was RMB21,807 million (USD3,296 million), a decrease of 3% YoY. Operating margin decreased to 30% from 40% last year.

Profit for the period was RMB18,580 million (USD2,808 million), an increase of 2% YoY. Net margin decreased to 25% from 32% last year. Profit attributable to equity holders of the Company for the quarter was RMB17,867 million (USD2,700 million), a decrease of 2% YoY. Gaming has a huge impact on that.

Tencent’s Key Activities in Q2 2018

Tencent expanded the capabilities and usage of WeChat Mini-Programs, whose daily active users has exceeded 200 million, by integrating them with other digital tools, such as WeChat Pay, to provide customized solutions for a broader range of verticals.

Tencent has built up a sizable developer ecosystem with a large and expanding base of external developers and software integrators, as well as a consumer base of over 200 million DAUs.

Tencent views WeChat Mini-Programs as complementary to native mobile apps and believes it will contribute materially to their user experience, enterprise relationships, the development of their payment, advertising, and cloud businesses.

During Q2 2018, the total daily pageviews of QQ KanDian and Mobile QQ Browser together increased 55% year-on-year, while the total daily short video views of the two properties combined climbed over 3 times, year-on-year.

Users data on Tencent platforms

Combined MAU of Weixin and WeChat were 1,057.7 million, an increase of 9.9% YoY.

MAU of Qzone was 548.3 million, a decrease of 9.5% YoY. Smart device MAU of Qzone was 542.7 million, a decrease of 7.3% YoY.

Fee-based VAS registered subscriptions were 153.9 million, an increase of 30.3% YoY.

Tencent’s payment business had over 800 million active users as of end June 2018 with an increase of 40% in the average daily transactions. The offline payment transactions grew by 280% YoY.

WeChat Mini-Programs: top categories and referring sources 2018

Tencent announced total revenue of USD11.693 bn for Q1 2018, an increase of 48% from Q1 2017. Monthly active user accounts (“MAU”) of QQ was 805.5 million, a decrease of 6.4% YoY. Smart device MAU was up by 2.4% year-on-year to 694.1 million. WeChat MAU exceeded 1 billion.

Tencent made record profit of RMB23.973 billion (US$3.812 million) in Q1 2018, up 65% over Q1 2017. Non-GAAP profit attributable to equity holders of the Company was RMB18.313 billion (US$2.912 billion), an increase of 29% year-on-year. Capital expenditure was RMB6.318 billion. Free cash flow was RMB13 billion, down 46% year-on-year.

Revenues from online games grew by 26% to RMB28.778 billion, mainly driven by smartphone games, including existing titles such as Honour of Kings, and newly launched titles such as MU Awakening and QQ Speed Mobile.

Communications and Social

QQ: Monthly active user accounts (“MAU”) of QQ was 805.5 million, a decrease of 6.4% YoY. Smart device MAU was up by 2.4% year-on-year to 694.1 million. QQ KanDian, the news feed service within QQ, achieved over 80 million DAU.

Weixin and WeChat: Combined MAU was 1,040.0 million, representing year-on-year growth of 10.9%. Tencent opened up the platform of Mini-Programs to third-party game developers in late March and over 500 Mini Games are now available. Check out WeChat Mini-Programs status report 2018 here.

REPORT: WeChat digital ecosystem 2018: WeChat Pay, Official Accounts, Mini-Programs

Online Games

Smartphone games achieved approximately RMB21.7 billion revenues, up 68% year-on-year, driven by in-house mobile titles such as Honour of Kings and QQ Speed Mobile. Honour of Kings remained as the highest grossing smartphone game in China’s iOS Top Grossing Chart. New title QQ Speed Mobile became the second-highest smartphone game in China’s iOS Top Grossing Chart during Q1 2018.

PC client games achieved approximately RMB14.1 billion revenues, flat compared with the prior year period. Active users declined due to the continued time shift to mobile devices while core user engagement remained largely stable.

Digital Content

Total fee-based VAS subscriptions grew by 24% year-on-year to 147 million, primarily driven by video and music streaming services. Tencent Video reinforced its industry leadership in China by mobile DAU and subscriptions. Mobile daily video views increased by over 60% year-on-year.

Total video revenues were up 75% year-on-year, in particular, video subscription revenues grew by 85% year-on-year.

Online Advertising

Online Advertising business achieved 55% year-on-year growth in revenues.

For media advertising, revenues grew by 31% year-on-year. Within which, video ad revenues increased 64% year-on-year due to more pre-roll ads benefiting from the growth in video views, and Tencent’s enhanced capability to develop creative ad formats within original productions. Video and news revenues decreased quarter-to-quarter due to the low seasonality for advertising activity in Q1 2018.

For social and others advertising, the 69% year-on-year increase in revenues was driven by an expanded advertiser base boosting ad fill rates in WeChat Moments, and higher CPC for Mobile Ad Network. The sequential decrease in revenues was mainly due to the low seasonality in Q1 2018. Amid the low seasonality, QQ KanDian revenues increased due to fast growth in traffic.

Weibo monthly active users reached 411M, 93% from mobile in Q1 2018

The total number of monthly active users on WeChat reached 963 million, an increase of 19.5% YoY according to Tencent’s latest financial results. QQ MAUs dropped 3.9% to 662 million.

Tencent achieved 59% YoY revenue growth in Q2 2017 to RMB 56,606 million (USD8,356 million), driven primarily by smart phone games and PC games, payment related services, online advertising, and digital content subscriptions and sales.

• Value Added Services Revenues increased by 43% to RMB36,804 million for 2Q2017 on a YoY basis.
• Online games revenues increased by 39% to RMB23,861 million, primarily driven by revenue growth from Tencent’s smartphone games, including existing titles such as Honour of Kings, and new titles such as the China version of Contra Return, Dragon Nest Mobile and Legacy TLBB Mobile, and from our key PC titles such as LoL and DnF.
• Social networks revenues increased by 51% to RMB 12,943 million, mainly reflecting growth in revenues from digital content services such as live broadcast, video and music, as well as from item sales in smart phone games.
• Online advertising revenues increased by 55% to RMB10,148 million for 2Q2017 on a YoY basis.
• Media advertising revenues grew by 48% to RMB4,077 million. The increase mainly reflected higher traffic for Tencent Video services and news feed advertisements for our Tencent News products.
• Social and others advertising revenues grew by 61% to RMB6,071 million. The increase primarily reflected growth in advertising revenues derived from WeChat and other mobile apps.

Its operating profit grew by 57% YoY to RMB 22,560 million (USD3,330 million). Profit attributable to equity holders of the Company increased by 70% YoY to RMB 18,231 million (USD2,691 million). Non-GAAP profit attributable to equity holders of the Company increased by 45% YoY. Free cash flow grew by 80% YoY.

Tencent’s Digital Property Update for Q2 2017

Monthly active user accounts (“MAU”) of QQ was 850 million, a decrease of 5.4% YoY. Smart device MAU of QQ was 662 million, a decrease of 3.9% YoY. Peak concurrent user accounts (“PCU”) of QQ (for the quarter) was 268 million, an increase of 8.4% YoY.

Related: Weibo MAU up 28% to 361 million in June 2017

Smart device MAU for users aged 21 years or below was up YoY, demonstrating QQ’s increased popularity among younger users. Popular features within Mobile QQ, such as Kandian news feeds, increased average user time spent within Mobile QQ.

Combined MAU of Weixin and WeChat were 963 million, an increase of 19.5% YoY.

MAU of Qzone was 606 million, a decrease of 7.0% YoY. Smart device MAU of Qzone was 586 million, a decrease of 3.5% YoY. Tencent introduced campus page to increase engagement among users in high schools and colleges.

Fee-based VAS registered subscriptions were 118 million, an increase of 12.4% YoY.

China mobile social app users’ purchase behavior overview 2017

Tencent reported the first quarter total revenues of 49,552 million yuan (USD7,182 million) in 2017, an increase of 55% over Q1 2016. WeChat MAU further grew to 938 million while QQ and Qzone MAU saw a decrease in Q1 2017.

Tencent’s Finance Performance in Q1 2017

• Online games revenues grew by 34% YoY to 22,811 million yuan for Q1 2017
• Social networks revenues grew by 56% YoY to 12,297 million yuan
• Online advertising revenues increased by 47% YoY to 6,888 million yuan
• Media advertising revenues (mainly including those generated from Tencent news, video and music properties) increased by 20% YoY to 2,509 million yuan

Tencent’s operating profit was 19,272 million yuan (USD2,793 million) in Q1 2017, an increase of 44% YoY. And, operating margin decreased to 39% from 42% last year.

Its profit for the period was 14,548 million yuan (USD2,109 million), an increase of 57% YoY. Net margin was 29%, the same as Q1 2016. Basic earnings per share were RMB1.540. Diluted earnings per share were 1.522 yuan.

Tencent’s entertainment services benefited from the Chinese New Year holiday, and several of their products achieved notable growth during Q1 2017. These include Tencent’s video platform which featured popular original content, as well as newer products such as the karaoke app WeSing, photo editing app Pitu, and mobile games Honour of Kings.

Tencent’s Business Review in Q1 2017

• Monthly active user accounts of QQ was 861 million in Q1 2017, a decrease of 2% YoY
  • Smart device MAU of QQ2 was 678 million, the same as last year.
  • Peak concurrent user accounts of QQ was 266 million, an increase of 3% YoY.
• Combined MAU of Weixin and WeChat were 938 million, an increase of 23% YoY. Weibo MAU grew to 313M in Q1 2017
  • WeChat Mini-Program saw faster growth of daily active users
  • A snapshot of WeChat Economy in 2016
  • WeChat on mobile search in Q1 2017
  • Tencent launched WeChat Index to check the trend on WeChat
  • WeChat Ads Exchange for Official Accounts
  • Starbucks partners with WeChat
  • WeChat Usage Stats for Chinese New Year 2017
  • Native video ads on WeChat
• MAU of Qzone was 632 million, a decrease of 3% YoY
  • Smart device MAU of Qzone was 605 million, the same as last year.
  • Fee-based VAS registered subscriptions were 119 million, an increase of 10% YoY

Tencent’s total revenues in 2016 were 151,938 million yuan (US$21,903 million), an increase of 48% YoY. Operating profit was 56,117 million yuan (US$8,090 million), an increase of 38% YoY. Profit for the year was 41,447 million yuan (US$5,975 million), an increase of 42% YoY.

Total revenues of Tencent in Q4 2016 were 43,864 million yuan (US$6,323 million), an increase of 44% YoY. Its operating profit was 13,930 million yuan (US$2,008 million), an increase of 28% YoY. Profit for the period was 10,523 million yuan (US$1,517 million), an increase of 46% YoY.

Tencent’s Advertising Business in 2016

For key accounts, Tencent increased the penetration by offering integrated solutions across brand and performance advertising products. For long-tail accounts, Tencent grew the number of small and regional marketers by sharpening their targeting algorithms and upgrading self-service tools “Guangdiantong” for campaign management and results measuring.

Related: Case Studies: Native Video Ads on WeChat Moments

Social and performance advertising. Tencent’s social advertising inventory remained as a key attraction to advertisers, leveraging the platform’s superior targeting capability, unparalleled consumer reach, and premium brand image.

Tencent enabled advertisers and WeChat Official Accounts to select each other, better matching relevant advertisements with appropriate content.

Brand advertising. For video, Tencent prioritized sponsorship advertising to better capitalize on their premium inventory. For Tencent’s news applications (Tencent News, Kuaibao), it further upgraded the targeting capabilities.

Tencent’s Payment Business in 2016

Tencent surpassed 600 million mobile payment monthly active user accounts and average daily payment transactions in December 2016. Its payment related services provide fast and seamless experience for a widening range of offline consumption scenarios such as taxi booking, convenience stores, restaurants, and supermarkets.

Performance of Tencent Platforms

Social Platforms

• MAU of QQ was 868 million, an increase of 2% YoY.
  • Smart device MAU of QQ was 652 million, an increase of 2% YoY.
  • Peak concurrent user accounts of QQ (for Q4 2016) was 244 million, an increase of 1%
    YoY.
• Combined MAU of Weixin and WeChat was 889 million, an increase of 28% YoY
  • WeChat Usage Stats for Chinese New Year 2017
  • Top WeChat stats and trends 2016
• MAU of Qzone was 638 million, a decrease of 0.3% YoY.
  • Smart device MAU of Qzone was 595 million, an increase of 4% YoY.
• Fee-based VAS registered subscriptions were 110 million, an increase of 16% YoY

Media Platforms

• Tencent Video: the number of paying users exceeded 20 million, , more than tripled YoY
• DAU of Tencent’s online karaoke application WeSing reached 35 million in 2016, more than doubled YoY, establishing itself as the largest online karaoke community in China
• The number of daily paying readers reached approximately 2.5 million, more than doubled YoY

Utility Platforms

• Security. Tencent’s mobile security application expanded its industry leadership, ranking first in China in terms of MAU according to QuestMobile
• Tencent’s App Store Yingyongbao was ranked first among all Android app stores in China by QuestMobile in terms of MAU
• QQ Browser (mobile app) ranks first in China in terms of MAU which also made significant contributions to the user growth of Tencent’s digital literature services

Continue to read ⇒ An Essential Guide to WeChat Mini-Program

The monthly active users (“MAU”) of WeChat reached 818 million in September 2016 with an increase of 32.8% YoY according to QuestMobile. Its daily active users (“DAU”) exceeded 625 million.

The second to the fifth mobile apps by MAUs are QQ, Taobao, and Weibo. The number of Weibo app MAUs exceeded 390 million in September 2016, with a huge growth of 79% YoY; its DAUs exceeded 105 million.

Varieties of communities are built online and organized by companies, interest groups, or entrepreneurs in China. The most frequently used platforms of communications in the online communities are WeChat Group, QQ Group, and WeChat Official Account.

Online communities use a variety of tools for communicating with community members including WeChat (61.1%), custom-made app (55.6%), WeChat Official Account (52.8%), websites, QQ Group, Weibo, online forums, Baidu Post Bar (Baidu Tieba), Weibo Group, emails, and Douban.

The top platforms of communications in the online communities are WeChat Group, QQ Group, and WeChat Official Account.

Engagement is crucial for maintaining and growing online communities in China; the top types of engagement activities are offline activities, online sharing of information & resources, special offers for community members, and etc.

Most online communities members don’t have a high income as about 55.6% make no more than RMB 100,000 a year.

Read more: China social application user insights 2016

Social application market develops rapidly, satisfying users’ various needs such as communication, entertainment, interests, and work. Instant messaging and social networking are the top two most popular features of social applications in China.

Instant messaging had for the highest usage rate of 90.7% according to CNNIC, followed by social networking (60.7%), and photo/video networking (45.4%). Online community ranks fourth most popular feature with 32.2%.

Users between 20-29 years old represent the largest age group in China social media, followed by those 19 year-old and below, and 20-29 y-o.

Users who have junior high education account for 35.8%, followed by senior high/technical secondary/technical school education (31.3%).

About one-third of social media users in China has a monthly income of between 3,000 to 5,000 yuan, representing the largest income group of China social media users, followed by 2,001-3,000 yuan (17.8%) and 5,001-8,000 yuan (17%).

Enterprise company employees form the biggest profession group of China social application users (31%), followed by freelancers (15.7%) and professional technicists (13.7%).

Over one-third (36.9%) of China mobile social media users’ has a daily average online duration of over 6 hours.

QQ and WeChat are two leading platforms in terms of instant messaging app usage rate, accounting for 90.3% and 81.6% respectively.

Mobile instant messaging apps QQ (75.8%), WeChat (69.1%), and Momo (7.3%) are top 3  by usage rate.

Baidu Tieba ranks top among China’s online communities with almost half (45.7%) social media users.

2.9% social media users in China use Maimai as their professional social networking application, ranking top and followed by LinkedIn China’s app.

Interacting with friends is the top purpose for people to use social applications (72.2%) in China, followed by following trending news in time (64.3%), following interesting content (59%), getting useful knowledge and help (58.3%), and sharing useful knowledge (54.8%).

Watching videos and listening to the music is the most frequent used feature by China social media users.

Contacts in social applications are mainly friends in real life (87.3%), classmates (85.3%), colleagues (81.2%), and families/relatives (79.7%).

China social media users are quite active with more than 63% accessing to social applications on a daily basis.

Also read: Mobile social app Momo benefiting from China’s booming live broadcasting business

Monthly active users (“MAUs”) of WeChat, including Chinese version Weixin, reached 762 million in Q1 2016 according to the latest Tencent financial results.

QQ MAUs reached 877 million in Q1 2016, an increase of 5% YoY; mobile QQ MAUs 658 million, an increase of 9% YoY. Peak concurrent user accounts of QQ in Q1 2016 was 260 million, an increase of 14%
YoY.

MAUs of Qzone reached 648 million in Q1 2016, a decrease of 3% YoY, while MAUs of Mobile Qzone was 588 million, an increase of 4% YoY.

Total revenues were RMB31,995 million (USD4,952 million) in Q1 2016, an increase of 43% over the first quarter of 2015. Operating profit was RMB13,398 million (USD2,074 million), an increase of 43% YoY.

Operating margin was 42%, the same as the first quarter of 2015. Profit for the period was RMB9,268 million (USD1,434 million), an increase of 34% YoY. Net margin decreased to 29% from 31% last year.

In April 2016, Tencent launched Enterprise WeChat, a stand-alone application which is tailored to communication scenarios at work and incorporates mobile office solutions such as calendar and company notice management.

Also read: WeChat launched Moments Coupon Ads for retailers

China’s top 6 mobile social apps by the total number of monthly reached users in Q4 2015 are WeChat/Weixin (535 million), QQ (496 million), Momo (56.9 million), Aliwangwang (27.4 million), Yixin (14.4 million), and DDChong (8.83 million; formerly called Laiwang).

You can download this ebook on Box.com or Baidu Cloud.

Continue reading China Social Media Users Insights in 2015 or check out China social media marketing trends here.

Weibo was the most active social mobile app in China in 2015 with high user monthly coverage rate and long usage time according to TrustData. Monthly active users of Weibo was 222 million as of September 2015 according to Tencent and daily coverage rate of Weibo was 12.4% ranking first in mobile information apps.

Alibaba and Tencent accounted for the majority of top 10 mobile apps by user coverage in China in 2015. Weibo app, one of few made it to the top 10 that don’t belong to BAT, had 21.7% monthly user coverage rate in 2015. WeChat and QQ were the top two with the highest user coverage rate.

Compared with video or news apps, social communication apps such as WeChat and QQ had high usage time. Users launched Taobao app 5.26 times per month and Weibo 5.17 times per month. Daily active searches exceeded 200 million by the end of November 2015 on Weibo.

Although instant messaging apps had obvious advantages in using times, their average usage minutes were relatively shorter compared with video and browser apps. Average per usage minutes of Weibo were only 4.2 minutes shorter than 18.7 minutes of Tencent Video.

Among the mobile information applications including video apps, news apps, instant messaging apps and literary apps, Weibo ranked first in daily coverage users, followed by Tencent Video and Youku Video.

Monthly average retention rate of Weibo was 6.8 days higher than 5.7 days from Tencent News. 41.0% Tencent News users would use the app for 1 to 5 days and 1.9% would use 6 to 10 days in the following month. Weibo’s user retention rate was over 11 days.

Penetration rate of Weibo was very high in tier-1 and tier-2 cities in China in 2015. The young generation was the driving force. 44.4% Weibo users used e-commerce apps every day ranking first in mobile apps, followed by iQIYI and Youku.

Also read: Weibo Publishers Profit to Double to 400M Yuan in 2016

Tencent’s total revenues in 2014 were RMB78,932 million (USD12,899 million), an increase of 31% YoY. Profit for the year was RMB23,888 (USD3,904 million), an increase of 53% YoY. Net margin increased to 30% from 26% last year.

Tencent’s online advertising revenues increased by 75% YoY to RMB2,627 million due to growth in video advertising as a result of more viewers and enhanced revenues from performance-based social advertising on mobile-driven by Mobile Qzone and WeChat Official Accounts.

In comparison, Tencent’s eCommerce transactions business revenues decreased by 87% YoY to RMB446 million as it shifted traffic to JD.com following their strategic transaction with JD.com in March 2014, and the repositioning of their Yixun business from principal to marketplace operations.

Tencent’s Key platform statistics in 2014

• Monthly active user accounts (“MAU”) of QQ was 815 million, an increase of 1% YoY.
• Smart device MAU of QQ was 576 million, an increase of 33% YoY.
• Peak concurrent user accounts (“PCU”) of QQ was 217 million, an increase of 21% YoY.
• Combined MAU of Weixin (Chinese version of WeChat) and WeChat were 500 million, an increase of 41% YoY.
• MAU of Qzone was 654 million, an increase of 5% YoY.
• Smart device MAU of Qzone was 540 million, an increase of 30% YoY.
• Fee-based VAS registered subscriptions were 84 million, a decrease of 6% YoY.

Also read: Mobile GMV Accounted for 42% of Total Alibaba GMV in Q4 2014

Business social networking is growing fast in China nowadays. According to Tencent’s latest  research, 52.9% respondents used business communication tools in their companies in 2014 including Tencent RTX, Enterprise Fetion, Enteprise QQ as well as Netease EIM.

According to the latest data of Tencent’s research, the most used communication tool in the company was QQ, which accounted for 37.6%, followed by WeChat(23%).

Although the popularity of company communication tools was over 50% in 2014, only 14.5% of users took the tools as most used communication tools in the company which indicates there are many issues that need to be solved for business communication.

46.4% respondents showed their concern about not having effective communication tools in the company in the research in 2014.

Most used feature is to search for colleagues’ contacts which made it the most important function of company communication tools at work.

As the rapid development of mobile internet, mobile working is popular. It is more convenient to login on mobile phone as well as desktop.

There are more challenges for paid company communication tools in China. 74% respondents did not pay for such tools according to Tencent’s research.

53.9% respondents wanted Company WeChat Moments to share their working updates in the research.

Also read: China Mobile Social Networking Overview & Top Apps

Total hongbao volume on Chinese New Year eve exceeded one billion on WeChat compared with 240 million on Alipay. The volume during the same period on Weiob was 101 million who started Hongbao campaign on 2 Feb 2015.

Hongbao, or red envelope, is the Chinese people’s traditions and customs. Every Chinese New Year’s (“CNY”) Eve, a junior will be given some money, packed in a red envelope. In ancient times, the money is used to scare a monster. Gradually, envelopes also became the best carrier between relatives and friends for blessings and good luck in special occasions such as wedding, birthdays, and new-born’s 100th day.

In 2014, WeChat hongbao attracted 8 million users from CNY eve and the eighth day giving away 40 million virtual red envelopes. QQ also gave away virtual hongbao roth 3 billion yuan. 154 million users participated in 637 million hongbao competition on CNY eve.

WeChat collaborated with CCTV this year during Chinese New Year 2015 giving away 500 million yuan cash hongbao and 3 billion coupon hongbao. CCTV programs, especially Spring Festival Gala invited viewers to use “Shake” feature on WeChat to get hongbao including cash and coupons.

Also read: 80% Willing to Travel During Chinese New Year Holidays 2015

A report conducted by Beijing Normal University shows Wechat penetration rate in Beijing and Shenzhen accounted for 51.7%. Wechat, QQ and Weibo are three major social apps among Chinese with more male users. Wechat had higher total user reach over 40 years old group than QQ while for under 40 years old group Wechat’s reach is the lower.

Wechat had 438 million monthly active users in Q2 2014 in China. Wechat’s social features attract Chinese users such as its mobile gaming social platform, micro-video and business accounts for team collaboration, card payment and so on.

The report shows 40% Wechat users have less than 50 contacts on Wechat. Overall, male Wechat users have more contacts than female ones in China. Besides, higher education & higher salary users tend to have more Wechat friends. 26.1% Wechat users use Wechat Moments every day according to the report.

Professor Zhang Hongzhong from Beijing Normal University, believes that, Wechat groups in China have high engagement and credibility in Chinese society nowadays; in other words, they get high virtual social capital. However, Wechat group’s virtual social capital has limited impact on offline behaviors.

Also read: Why Wechat Marketing Metrics Could All Be Lies

Chinese post-90s are the most active QQ users, accounting for 39% of total users, followed by post-80s and post-00s according to Tencent on Tencent’s Open Day in October 2014.

During period from 4 August to 10 August, Tencent QQ’s daily user coverage exceeded 220.75 million, accounting for 63.5%, ranking the top among China online instant messengers, and effective time on Tencent QQ went up to 759.33 million hours, accounting for 90.7% of total effective time in China instant messengers market.

Tencent QQ got into guinness world record for having the most number of simultaneous online users on an instant messaging platform on 3rd July, 2014.

QQ is making efforts to be featured with young design, colorful characters and social diversity. Tencent is establishing online community based on common interest on mobile QQ. According to research of Tencent and EnfoDesk, 40.89% of Chinese post-90s would like to make friends with ones who have common interest through online social media.

Smart device MAU of QQ was 542 million, more than WeChat which was 468 million in Q3 2014. This is a bit surprising considering the growth rate of QQ has been slowed down.

Also read: The Latest Stats on QQ and Wechat in Q3 2014

WeChat official account has been launched for over two years, which has attracted businesses and individuals to the platform. QQ, being quiet connecting businesses and individual users, launched their “Lifestyle Service Account” in November 2014.

Smart device MAU of QQ was 542 million, more than WeChat which was 468 million in Q3 2014. This is a bit surprising considering the growth rate of QQ has been slowed down.

Mobile QQ’s service account, similar to that of WeChat’s, offers merchants service account via 2D code, which connects users and businesses once scanned and followed. However, it kept one key dial-in to merchant customer service on a prominent position. Users can use voice guidance as services such as tracking for delivery status and requesting for delivery.

Mobile QQ and WeChat official accounts can roughly provide the same service to users; one with voice, the other with text menu. Many China internet users would prefer getting services via voice comparing with text menu on WeChat, especially on services with immediate or even real time response required.

Mobile QQ service account will be open for public registration at the end of 2014 or early next year according to Yin Yu, VP of Tencent at World’s Internet Conference.

Read more: Wechat Launched Wechat Contacts App Offering Free Calls

Tencent’s total revenues were RMB19,808 million (USD3,220 million) in Q3 2014, an increase of 28% YoY. Profit for the period was RMB5,676 million (USD923 million), an increase of 46% YoY.

Mr. Ma Huateng, Chairman and CEO of Tencent, said,

We achieved another quarter of solid growth in our platforms, revenue and earnings. Our online advertising business expanded particularly swiftly, as we deployed targeted performance-based advertising on Mobile Qzone and Weixin Official Accounts. Given our traffic leadership and logged-in relationship with users, together with the proven scale of performance-based advertising services in China and overseas, we see ample scope for growth in our performance-based advertising business. During the quarter, we also retained our industry leadership in mobile and PC games, increased the market share of our app store YingYongBao significantly, and reinvigorated our subscription products via enhanced mobile privileges. Looking forward, we will deepen our partnerships with vertical leaders and continue to invest in our platforms, products, and people.

Tencent’s revenues from smart phone games integrated with Mobile QQ and Wechat also grew, with an expanded user base and full quarter revenue contribution compared to the same period last year. Social networks revenues increased by 47% to RMB4,723 million, due to increased item sales on mobile platforms and renewed growth of subscription revenues, as Tencent enhanced mobile privileges and mobile user experience for QQ Membership, Super VIP and Qzone subscription service.

In the third quarter of 2014, QQ and Qzone benefited from further growth in mobile user base and enhanced user engagement. For QQ, smart device MAU increased by 36% YoY to 542 million at the end of the quarter.

Mobile QQ experienced enhanced popularity of location-based groups and growth in the user base of Mobile QQ Wallet. New lifestyle services, including shopping, restaurant deals and health monitoring, were integrated with Mobile QQ to deepen its connection with users’ daily lives. For Qzone, smart device MAU increased by 26% YoY to 506 million at the end of the quarter.

Combined MAU of Weixin and WeChat reached 468 million at the end of the third quarter of 2014, representing YoY growth of 39%. Tencent deepened user interaction with the launch of a short video sharing feature (and a contacts app this month), and they improved content discovery through integrated in-application search.

Wechat Payment gained popularity as Tencent focused on enhancing its functionalities. Wechat extended the “shake” function to enhance the real-time engagement of Wechat users with TV programmers, such as the Voice of China 3, via interactive games and social sharing.

Tencent Key platform statistics

• MAU of QQ was 820 million, an increase of 1% YoY
• Smart device MAU of QQ was 542 million, an increase of 36% YoY
• PCU of QQ was 217 million, an increase of 22% YoY.
• Combined MAU of Weixin (Chinese version of Wechat) and WeChat were 468 million, an increase of 39% YoY
• MAU of Qzone was 629 million, an increase of 1% YoY
• Smart device MAU of Qzone was 506 million, an increase of 26% YoY.
• Fee-based VAS registered subscriptions were 89 million, stable YoY.

Read more: Stats of Top Selling Brands on Taobao/Tmall in 18 Categories

Wechat was the most popular mobile app in China in September 2014 with 377.92 million monthly active users, followed by QQ (308.742 million) and Baidu (145.047 million) according to data from EnfoDesk.

The top 3 mobile apps in China remain the same from August. QQ Zone’s active users increased to 110.87 million which had an increase from August while QQ music had a little decrease in MAUs in September.

Top 100 Mobile Apps in China

Download a PDF copy here.
Also read: China Mobile App Distribution Channels Market Share

Wechat officially announced business accounts in beta, which targets business use of Wechat providing mobility and timely convenience for work.

Wechat business accounts provide business contacts managment, tags, transfers of various types of files and documents, secured messaging (only recipient can read the message with forwarding and screen capture disabled). Business account is in separate interface from regular Wechat accounts and official accounts. In addition, businesses and enterprises can create custom applications with Wechat open API.

This month, Wechat also launched a “card payment” feature with which users can make fast payment at supported retail chains. In addition to business accounts, companies can also utilize the Wechat advertising platform to drive traffic and app downloads, and increase Wechat fans.

Read more: Why Wechat Marketing Metrics Could All Be Lies

Tencent announced its 2014 Second Quarter Results yesterday in which it reported Wechat now has 438 million monthly active users and Qzone 645 million.

Total revenues that Tencent generated in the second quarter of 2014 were RMB38,146 million (USD6,200 million), an increase of YoY 37%.

Summary of Tencent Key Platform Stats in Q2 2014

• MAU of QQ user accounts were 829 million, a decrease of 2% QoQ or an increase of 1% YoY
• Smart device MAU of QQ was 521 million, an increase of 6% QoQ or an increase of 45% YoY
• PCU of QQ was 206 million, an increase of 3% QoQ or an increase of 19% YoY
• Combined MAU of Weixin and WeChat were 438 million, an increase of 11% QoQ or an increase of 57% YoY
• MAU of Qzone was 645 million, stable QoQ or an increase of 3% YoY.
• Smart device MAU of Qzone was 497 million, an increase of 6% QoQ or an increase of 37% YoY
• Fee-based VAS registered subscriptions were 88 million, stable QoQ or a decrease of 11% YoY

Tencent enhanced the ecosystem on Mobile QQ by connecting with the services of their strategic partners, such as JD.com and Dianping, and upgrading Mobile QQ Wallet, which enables users to purchase virtual goods and settle O2O transactions via their bank cards.

Tencent enhanced community activity through new functions such as Interest Tribes and improved the user experience for picture sharing. For Qzone, smart device MAU increased by 37% YoY to 497 million at the end of the second quarter of 2014.

Tencent enhanced the community and payment functionalities of Wechat, and broadened the breadth and
reach of service offerings by connecting with their strategic partners. For instance, users can now purchase products from JD.com through a direct access point in Wechat and settle
the transactions via Wechat Payment, and can search content of Wechat Official Accounts via Sogou.

In the second quarter of 2014, Tencent advertising business benefited from the growth in video advertising and performance-based social advertising, as well as the positive impacts of the FIFA World Cup and our strategic co-operation with JD.com.

During the quarter, Tencent made initial progress in monetizing mobile advertising opportunities, capitalising on Tencent’s significant traffic base across different mobile platforms.

For instance, in the second quarter of 2014, Tencent generated meaningful performance-based advertising revenues on Mobile Qzone, and they experimented with performance-based text link advertising on selected Wechat Official Accounts.

Click here to find out What you should Know and top 15 CIW posts for Q2 2014.

Source: Tencent

Jingdong’s mobile strategy on QQ focuses on limited time and group buying offers, branded products, popular products with three corresponding categories. Like its Wechat e-commerce operation, Jingdong manages all online shopping operations on mobile QQ and the payment is handled via Tenpay with online payment and cash on delivery option.

According to Jingdong, they will give away RMB1 billion Hong Bao money to users on mobile QQ.

Tencent and Jingdong (JD.com) together announced their strategic alliance this March; and, Jingdong will further push its online shopping market share with the “help” from Tencent.

Jingdong currently owns a little over 5% market share in China’s mobile shopping market, still far behind Tmall.

Previously it has been disclosed on Weibo that  Tencent is connecting its “QQ Marketing” to Wechat Official Platform, so that its enterprise clients can reach their customers through both mobile terminals.

As it turns out, WeChat launched the new “QQ Marketing for WeChat” on April 16, 2014. This new version of “QQ Marketing” came with an enhanced backstage management system, allowing enterprise clients to sync QQ with WeChat in customer management, as well as to use new functions such as image display, client communication, interactive marketing, online sales, tracking analysis, etc.

QQ Marketing mainly targets companies dealing with online customer service or product marketing. It comes with various built-in management functions based on Wechat Official Platform, including online call center, CRM, user tracking, user information storage, mobile site developing, etc. What’s remarkable about QQ Marketing is that whether or not the users initiate voice counselling on Wechat Official Platform, companies can always track user behavior, set up user behavior database, thus classify and label their customers by “value” according to their levels of activeness, frequency of interactions and clicking rates of different contents. This is certainly an important step toward customized marketing and long-term maintenance.

The fact that one of Tencent’s enterprise marketing product is connected to Wechat Official Platform exemplified the platform’s remarkable business value with its public account system and over 600 million users. As mobile marketing is leading the trend, the advantages of big data become all the more prominent. This, for Tencent, means popular mobile apps it owns such as QQ mobile and WeChat. Earlier this month, Tencent announced that the number of its mobile users simultaneously online topped 200 million, among which QQ mobile users accounted for 70%. In the meantime, Tencent’s financial report revealed total WeChat active users, in domestic and oversea markets combined, had reached 355 million by the end of last year. With this enormous user base, Tencent is confident enough to announce its plan to launch a self-service advertising platform, where verified public account owners and advertisers will have direct access.

However, on the part of WeChat, the team seems more interested in creating a better platform for service, as oppose to for marketing. The objective is to provide a new mode of interaction between businesses and customers, and thus materialize Tencent’s ambitions in O2O development. In line with this motive, WeChat team has just adjusted its group messaging policies for service account on the public platform, allowing verified service accounts to send at most 4 group messages per month to every follower. WeChat team insiders expressed that WeChat public account is designed to serve as  CRM platform. It is now moving from stage one, i.e. “interactive communication”, towards stage two, namely “user management”. By the time it reaches the third stage, WeChat will start cooperating with banks and institutions of such kind, providing its users with customized services.

The question of how to balance service with marketing in O2O business might pose as a major challenge for WeChat in the future.

On April 11, 2014, Tencent QQ Peaking Concurrent Users (PCU) hit 200 million for the first time. From 1999 to 2010, QQ users grew steadily to 100 million. In recent four years, QQ grasped mobile internet development and successfully doubled its PCU.

In 2014, QQ PCU grew drastically 20 million in 60 days.

Over 70% of these QQ users were from mobile terminal when QQ PCU reached 200 million.

Most people used QQ mostly for sending messages, followed by browsing Qzone and playing games.

And QQ users peaked at 9pm averagely, and a growing number of users became online at 5am and it peaked at 12am which would continue to 10pm.

It seemed that Chinese tended to chat in groups, 25.1% would chat in groups and 21.9% would join group video chat.

Guangdong, Jiangsu and Zhejiang provinces were the top three in China which had high QQ PCU.

Tencent recently released unaudited comprehensive performance of Q4 by December 31, and audited 2013 annual performance. In Q4, Tencent gross revenue reached 16.97 billion Yuan (USD 2.783 billion), with a 9% QoQ growth and a 40% YoY growth.

2013 Annual Performance Abstract:

• Gross revenue reached 60.437 billion Yuan (USD 9.913 billion), up 38% from a year earlier.
• Operating profit was 19.194 billion Yuan (USD 3.148 billion), increasing by 24% from a year earlier. The operating margins fell from 35% to 32%.
• Non-GAAP operating profit rose 22% to 20.768 billion Yuan (USD 3.406 billion); the non-GAAP fell from 39% to 34%.
• Profit attributable to shareholders was 15.502 billion Yuan (USD 2.543 billion), with a 22% YoY growth.
• Non-GAAP profit attributable to shareholders was 17.063 billion Yuan (USD 2.799 billion), up 19% from a year earlier.
• Basic earning per share reached 8.464 Yuan and diluted earning per share was 8.298 Yuan.

2013 Q4 Performance Abstract:

• Gross revenue reached 16.970 billion Yuan (USD 2.783 billion), with a 9% QoQ growth and a 40% YoY growth.
• Operating profit was 4.751 billion Yuan (USD 779 million), increasing by 24% compared to last year, but fell 1% compared to last month; the operating margins fell from 31% last quarter to 28%.
• Non-GAAP operating profit was 5.325 billion Yuan (USD 873 million), on par with Q3,  increasing 23% from a year earlier ; the non-GAAP fell from 34% to 31%.
• Profit attributable to shareholders was 3.911 billion Yuan (USD 641 million), 1% higher than Q3 and 13% higher than a year earlier.
• Non-GAAP profit attributable to shareholders was 4.498 billion Yuan (USD 738 million), up 3% from Q3 and 11% from a year earlier.
• Basic earning per share reached 2.125 Yuan and diluted earning per share was 2.092 Yuan.

The revenue from value-added service rose 3% from last quarter to 11.932 billion Yuan (USD 1.921 billion), accounted for 70.3% of Q4 revenue.

Online advertising revenue increased 8% to 1.497 billion Yuan (USD 241 million), taking up 8.8% of Q4 revenue. The revenue of online video advertising and social network advertising grew, offsetting the influence of transferring Tencent online searching business to Sogou.

The revenue of e-commerce increased by 41% from last quarter to 3.324 billion Yuan (USD 535 million), taking up 19.6% of Q4 revenue. The growth was mostly caused by seasonal promotion activities.

Main Platforms Data:

• The monthly active IM accounts hit 808 million, down 1% from Q3 but up 1% from Q4 2012.
• Most concurrent IM accounts reached 180 million, with a 1% QoQ growth and a 2% YoY growth.
• Overall (domestic and abroad) WeChat monthly active accounts reached 355 million, 6% higher than last quarter and 121% higher than 2012.
• Qzone monthly active accounts increased to 625 million, up 0.3% from Q3 and 4% from Q4 2012.
• Most concurrent accounts of QQ Game platform reached 8.5 million, increasing by 4% from Q3 and decreasing 3% from 2012.
• Paid accounts of value-added service reached 88.6 million, on par with last quarter, but 15% lower than last year.

Main Business

QQ and Qzone maintained a leading position in China communication and social network. The number of user account was growing at a slower pace as user traffic was transferring from PC to mobile terminals. For QQ, monthly active accounts increased slightly by 1% to 808 million, and most concurrent accounts rose 2% to 180 million at the end of 2013. In 2013, Tencent significantly enlarged mobile QQ user group by improving user experience and enriched service such as game center. By the end of 2013, active QQ intelligent terminals accounts reached 426 million with a 74% YoY growth. For Qzone, monthly active accounts increased by 4% to 625 million. The activity and participation of mobile Qzone users both increased in 2013: monthly active Qzone intelligent terminal accounts increased by 63% to 416 million, and the number of pictures uploaded from mobile Qzone also increased.

Combined monthly active accounts of Weixin (WeChat domestic version) and WeChat reached 355 million by the end of 2013. WeChat expanded rapidly in China, and the user participation also rose in 2013. With new service such as game center, public accounts and WeChat payment, and the acceptance of Moment, WeChat was changing from a simple communication service to an integrated platform.

Tencent online advertising business kept expanding with the growth of Tencent media platform and social platform. The revenue of brand display advertising and performance display advertising both increased in 2013. For search advertising, the revenue fell because Tencent transferred its searching business to Sogou. Tencent believed Sogou’s merging with Soso would help improve its share of PC and mobile searching market.

The transaction volume and revenue of Tencent proprietary e-commerce business grew strongly. It was benefited from geographic coverage expansion, richness of goods and improving e-commerce infrastructure. As Tencent teamed up with Jingdong, the business, staff and asset of Tencent’s B2C platform (QQ Wanggou) and C2C platform (Paipai) and some of Yixun’s equity was transferred to Jingdong, while Jingdong got a call option on remaining equity of Yixun. Tencent and Jingdong would cooperate in online payment service and other fields.

According to Enfodesk, QQ got 325.71 million active users, ranked the first in mobile IM apps, followed by WeChat with 295.712 million. These two winner are both developed by Tencent,  beating the others by a long shot. Momo took the third place with 13.43 million active users. ChatOn and Wangxin ranked the fourth and fifth, respectively.

Enfodesk also released demographics of mobile IM users. The statistic suggested that share of male users was 23.38 points higher than female’s.Mobile IM users were predominant in below 35 age group, medium and low income groups.

In terms of occupation, workers/service workers were primary users. Public institution (including party and government office) leaders and staff also held an important position.

In the eyes of Tencent CEO Pony Ma, Wechat was opening a new way for Tencent. However, the real problem for Wechat was that in order to achieve, it would have to kill QQ. And this was happening.

In Tencent company, the staff all knew about the coming battle between QQ and Wechat, for internal development resources and dominance inside the company. QQ would be replaced gradually, which was not determined by market but largely due to Tencent’s future strategy.

In the PC end era, QQ represented everything of Tencent. QQ had a large number of user base, which drove large traffic and built membership, game, etc. QQ number was the connection to all Tencent business. However, in mobile end era, Wechat replaced QQ to be the core business of Tencent.

But it seemed that Wechat could not replace QQ to be the cash cow. At present, Wechat still did not have a mature business model, or the ability to generate large revenue continually. For Tencent, there’s no need for Wechat to become the money machine right now. It represented the future.

Tencent laid its focus on mobile internet, therefore, QQ was destined to end. It means except for revenue from games, most of Tencent’s revenue (up to 50%) needed to redefine. Considering the fact that Tencent gambled everything on Wechat, the transformation of revenue would speed up.

Wechat, unlike QQ, faced a different market situation. Although Wechat had millions of registered users, it still had to compete with Laiwang and Yixin. Therefore, Wechat dared not to charge its users and very unlikely in the future. On the contrary, QQ had built up a successful membership business model and proved by capital market. If Tencent give up QQ, it would not only face the decrease of revenue but also the growing risk. The intense competition in mobile IM market made Tencent give up making money from registered users, and it could not charge public accounts either.

Many outside analysts helped to design the future missions of Wechat, its strategic position was uplifted to an extremely high point. QQ department sensed the internal priority shifting towards Wechat. It’s no doubt that Wechat is killing QQ, but the problem will be how Tencent is going to survive when QQ revenue drops and Wechat has not begun making money.

iResearch released its core data report in Q3 2013, according to which the number of China internet user went up a little in Q3, having reached 480 million in September.

Internet services user coverage in September all dropped compared to June 2013, video and page search remained top with 430 million user coverage.

China internet user monthly effective time spent increased 5.8% in Q3 compared to Q2 2013, it went up in July and August and down a little in September.

Video watching time kept growing four quarters in a row, ranking the first with 5.07 billion hours effective watching time in Q3 2013. Effective time spent on social communities increased greatly, surpassing Weibo to be the sixth. SNS viewting time continued to drop in Q3, but the decreasing rate slowed down.

Average internet usage days per month dropped 1.5% quarterly in Q3, with 15.2 days.

Chinese internet users spent averagely 18.7 hours per month in Q3 2013, growing by 5%. In August, average time on internet monthly reached 19.4 hours, which was the highest of 2013.

Instant Messaging quarterly user coverage reached 480 million, with 97.0% penetration rate and high user stickiness.

In September, Tencent QQ and Ali wangwang monthly user coverage kept growing. Tencent QQ dominated 86.5% market share in quarterly effective using time, Ali wangwang ranked the second with 6.4%.

China IM effective usage time dropped by 7.3% to 11.15 billion hours in Q3 2013.

36kr.com and 3g.qq.com did a survey about mobile internet user behavior online, collecting 92,000 sample via 3g.qq.com. Most of respondents were between 23-30 years old, with 41.9%.

About one thirds of respondents used 2 or more mobile phones.

Nearly 75% respondents in China used smartphones.

10% users spent more than 8 hours on mobile, which means mobile occupied one thirds of their daily life.

More than half of respondents claimed that increasing time spent on mobile decreased their time on PC.

13.7% users said they saved their documents via cloud storage, while 18% said they didn’t know about cloud storage.

Thunder Walkbox, Sina vdisk and Evernote were the top 3 cloud storage apps.

More than 60% worried about SNS privacy leak.

Mobile users would take measures to prevent privacy leak, such as downloading app from official channels, hide their real identity on SNS and other methods.

As for how much SNS would affect work, 12% users spent half their working time on social networks.

One thirds of respondents preferred stand-alone games, and another one thirds didn’t play games.

Over 40% users didn’t download apps over a month, merely 6.6% would download at least an app everyday.

Mobile app recommendation platform and third-party app stores were the main channels where users gained new apps information.

Tencent announced on the 10th anniversary of QQ Game that the paid users had reached 35%. Tencent data showed that QQ Game platform includes more than 100 games, with 200 million active users. QQ Game platform had 8 million users online at the same time.

According to Enfodesk, 73% QQ Game users were male, far more than female users. And users whose age between 19-22 represent 22.9%, the largest user group. Young people between 19-30 represent more than half of total QQ Game users. High school students and university/college students were the main users of QQ Game.

Tencent published its Q3 finance report on November 13, by the end of September 30 2013, Tencent’s total revenue in Q3 reached 15.54 billion yuan (USD 2.53 billion), 34.3% more than that of 2012.

Key Financial Statistics:

• Total revenue in Q3 reached 15.54 billion yuan (USD 2.53 billion), with 8% QoQ increase rate and 34.3% YoY increase;
• Value-added service revenue reached 11.64 billion yuan (USD 1.89 billion), with 8.2% QoQ increase and 24.9% YoY increase;
• Online advertising revenue reached 1.39 billion yuan (USD 226.1 million), with 7.2% QoQ increase and 36.9% YoY increase;
• E-Commerce revenue reached 2.36 billion yuan (USD 383.8 million), with 7.3% QoQ increase and 108.1% YoY increase;
• Gross profit reached 8.50 billion yuan (USD 1.38 billion), with 9% QoQ increase and 25.4% YoY increase. And its gross profit rate dropped from 58.6% in Q3 2012 to 54.7% in Q3 2013;
• Net profit in Q3 reached 3.88 billion yuan (USD 630.5 million), with 5.2% QoQ increase and 19.6% YoY increase. And its net profit rate dropped from 28% in Q3 2012 to 25% in Q3 2013.

Financial Analysis:

Value-added service revenue grew by 24.9% quarterly and reached to USD 1.89 billion, occupied 74.9% of total revenue in Q3 2013. Online games reached to 8.42 billion yuan (USD 1.37 billion), with 35.4% YoY increase. The growth of online games was mainly from domestic PC games and international income growth. Revenue from social network grew by 3.7% annually, reaching 3.21 billion yuan (USD 523.7 million). Mobile QQ and Wechat games also contributed to social network and online games income growth.

Online advertising reached to USD 226.1 million with 36.9% annually growth, occupied 8.9% of total revenue in Q3. It was driven by social network advertising and online video advertising. Traditional brands advertising grew a little, too.

E-Commerce revenue in Q3 reached USD 383.8 million, growing 108.1% compared to 2012, occupied 15.2% of total revenue in Q3. It’s mainly because of the transaction growth on websites and increase of platform service fees.

Tencent Main Platforms Data

•  IM monthly active accounts reached 815.6 million in Q3, dropped by 0.4% compared to Q2 2013, increased by 4% compared to Q3 2012;
• IM highest online accounts reached 178.2 million in Q3, with 2.9% QoQ increase and 6.5% YoY increase;
• Weixin and Wechat monthly active accounts in total reached 271.9 million, with 15.3% QoQ increase and 124.3% YoY increase;
• Qzone monthly active accounts reached 623.3 million, with 0.5% QoQ drop and 5.1% YoY increase;
• QQ Game platfrom highest online accounts reached 8 million, dropped by 2.4% quarterly, and 12.8% less than that of 2012;
• Value-added service registered users reached 89 million, 9.8% less than Q2 and 17.2% less than that of 2012.

Platforms Performances:

In Q3 2013, the number of QQ users kept growing steadily, monthly active users grew by 4% annually and reached to 815.6 million. Smartphone QQ active users increased by 10.1% quarterly.

Weixin and Wechat monthly active accounts in total increased by 124.3% annually, reaching to 271.9 million. The new services, new functions and improved user experience attracted a large number of users. Besides, Wechat user’s growth was due to the international promotion campaigns.

Qzone monthly active users remained 623.3 million in Q3, almost the same with Q2 2013. But its mobile active users grew by 10.4% quarterly, which showed users gradually accepted mobile Qzone.

Tencent news made a significant growth in mobile-end. Through mobile QQ and Weixin/Wechat plugins, Tencent news expanded its users greatly.

In Q3 2013, Tencent’s value-added service registered users dropped slightly, which reflected paid users were transferring from PC-end to mobile-end. Smartphone payment channels were less than PC-end and feature phone. Right now, Tencent made some adjustment according to smartphone payment , making SVIP(super member qq VIP) the main payment channel for smartphone users.

QQ Game highest online accounts dropped in Q3 2013. The increase of mobile users became a distraction, and the influence of public platforms also affected user activities. Since August 2013, Tencent had launched several mobile QQ and Weixin/Wechat games, some of which ranked top in Apple store and Android stores.

Online advertising kept growing in Q3 2013. In brand display ads, online video advertising was benefited from the growth of ads and advertising price. In effect display ads, social network benefited from the increase of exposure and precised targeting, making customers CPC more competitive. In search ads, it’s expected the integration of Soso and Sogou would be completed by the end of 2013.

According to Enfodesk, China B2C market reached 162.4 billion yuan (USD 26.47 billion) in Q3 2013, with a 3% QoQ increase and a 50% YoY increase.

China online sale reached 415.3 billion yuan (USD 67.7 billion) in Q3, 41% more than 2012. B2C occupied 39% of total online sale, catching up with C2C market.

Tmall, Jingdong and Suning remained the top 3 B2C enterprises. Tmall and Jingdong both increased by 0.3%, reaching 49.2% and 18.3% share. Tencent’s QQ buy and 51buy market shares went up a little due to large traffic driving from Tencent platforms.

In Q3 2013, B2C independent sale market concentration increased, top 3 enterprises’ market shares together occupied 54.5%, increasing almost 2% compared to Q2. Jingdong led the market with 38.8%, 1.2% more than Q2; Suning ranked the second with 9.9%; Amazon China remained the third with 5.8%, but dropped slightly in Q3.

According to Enfodesk, in Q2 2013, Chinese cumulative mobile IM accounts hit 1.48 billion, with a QoQ increase of 21.3%. Chinese mobile IM active accounts reached 770 million, 75% more than that of 2012.

Mobile QQ was the top mobile IM app with 39.9% market share,, followed by Wechat with 29.1%. Together, QQ and Wechat occupied nearly 70% of mobile IM market.

Mobile IM app is a supplement for satisfying multi-device using experience, making communication as convenient as possible. Mobile QQ and Wechat incorporated game, SNS and media into its apps while strengthening communication function; China telecom newly launched Yiliao, gained its users fast by differentiate products basing on advantages of telecom operator and free service.

How does Tencent make billions from its membership? Today we will discover the membership secret of Tencent’s money machine.

Establish QQ Membership Hierarchy System

When Tencent established membership system, the key point was to charge members. How can Tencent make members continue to pay for QQ services? Tencent came up with membership hierarchy system, to make members sense the identity difference. Tencent has built 7 levels of hierarchy membership system, each of which enjoys different privileges.

For example, if you are VIP1, growing to VIP2 need 600 credits. Suppose daily credit is 5, then you need 120 days to grow to VIP2, which means four months membership fees. Tencent said a good membership hierarchy system should satisfy the basic need of customers, give users expectations and increase the cost of leaving. The main features of Tencent membership system are the identity difference and expectations.

In order to make it work, the difference between levels has to be big enough to arouse motivation for users to upgrade. Besides, the upgrade speed has to slow down as the level goes up. For example, upgrading from VIP1 to VIP2 takes 600 credits, and upgrading from VIP2 to VIP3 takes 1200 extra credits. In this way, the hierarchy system forms a pyramid structure. Designers have to make the user distribution in different levels suitable, not letting users to get to another level too fast, otherwise it would be difficult to maintain the users in a single level. What’s more, the top level has to be extremely hard to get and rare, attractive, becoming the pursuit of all users.

Last but not least, Tencent has to create new top level in the appropriate time to sustain the growth of users, give them expectations.” When the number of top level users is close to the second high level, it is time to create a new top level,” said by the membership product manger Mr. Liu in Tencent.

To set up a membership hierarchy is not difficult, what’s difficult is to maintain the system. Tencent reminds VIP members at all possible occasions of their levels, upgrade speed and goals to achieve. For example, when a member upgrade to a higher level, Tencent would send an email explaining all the privileges enjoyed by this level users.

Tencent motivates members by specified numbers, like ranking, to make them sense accomplishment. It is crucial to keep the hierarchy equal to every member, nobody can jump to next level.

Knowing the Need of Customers, Improving Customer Segmentation

In 2011, Tencent found some people sold QQ VIP membership symbol for 1 yuan (USD 0.16), and what’s astonishing was about 3 million users bought this service. Instead of warning the illegal sellers and punishing users who bought the service by cancelling their membership symbols, Tencent sent messages to these 3 million users and gave them 20% off for VIP membership. 15% of these users turned QQ VIP members.

Another example was the design of membership fee notification. Tencent designed two proposals, and tested them together in different groups of users, finally decided to adopt one according to the reaction of users.

Because Tencent has a large user database, so most of decisions are based on data analysis, and Tencent could target different groups of users to achieve customer segmentation. Membership management has built up a model of the existing members, new members and lost members.

Tian Tian Ai Xiao Chu, Tencent’s first mobile gamewith both Wechat and QQ login support, was downloaded 20 million times in 3 days.

The game is independent and separate from any other platform regarding acquisition of purchasable item/content. Users logged in with their Tencent’s platform accounts (either QQ or WeChat) are able to sync non-purchasing related information/data in the game, such as friend list, score and level.

Game currencies purchased/earned outside of the app. Similarly, any game currencies purchased/earned in this game on any other platform cannot be used in this app either. The app doesn’t use any QQ digital currency, such as Qcoin or QQ points.

TianTianAiXiaoChu, released on Aug 5, 2013, was the number one on Chinese AppStore free-app ranking merely 5 hours after its launch. By Aug 12, it ranked the second in Chinese AppStore best-sellers. As the official figures showed, TianTianAiXiaoChu was downloaded 20 million times since its launch on Aug 5. The user download rate through QQ was higher than Wechat

According to iResearch,Chinese online transaction market scale reached 352.1 billion yuan (USD 57.52 billion), with a year-on-year increase of 36.6%. B2C has surpassed 30%, increasing 10% compared to last year.

Tmall is leading B2C market, with 51.3% online market share in Q2, while Jingdong tops independent sales B2C market with 43.4% share.

Chinese B2C (including those launched by C2C) market scale in Q1 2013 reached 120 billion. B2C online market scale’s year-on-year increase was 96.5%, much higher than that of C2C.

Top five B2C enterprises are: Tmall, Jingdong, QQ Buy, Suning and dangdang. And top 10 platforms had 91.1% of the market, which is 3% more than last year.

In independent sales B2C market, Jingdong is the top with 43.4% share and its year-on-year increase is 100.8% in Q1.

In digital camera B2C market share, Jingdong had nearly 50% in Q1 according to iEcTracker, a third-party data monitoring owned by iResearch. Jingdong and Taobao together dominate 80% of online digital camera retail market.

According to Enfodesk, the top three mobile IM in China by total number of cumulative accounts are mobile QQ with 38.07% market share, Weixin (Wechat) with 27.97%, and Fetion with 18.37%.

QQ is also the leader in mobile IM active account market share with 42.54%, followed by Weixin with 23.38% and Fetion with 17.65%.

Mobile QQ has accumulated a large number of users through many years, which provided user base for Wechat (known as Weixin in China). Wechat cumulative accounts have grown from 25.89% in Q4 2012 to 27.97% in Q1 2o13, and active account market share growed from 19.9% in Q4 2012 to 23.38% in Q1 2013.

Liao.189.cn and Fetion, from ChinaNet and China Mobile respectively, also take a sizeable share of IM market.

Hou Xiaonan, the vice general manager of Tencent’s open platform recently announced that the monthly active users of WeChat, one of Tencent’s app had reached 190 million users; and, mobile QQ had reached 500 million, Qzone 600 million.

He also explained that almost 70% of the total users used mobile phones to log in. Moreover, the number had increased by about 5 times than that of last year.

According to TNS, UC mobile leads mobile app facetime but is closely followed by Mobile QQ, WeChat and Weibo.

The top five smartphone apps in China were dominated by social networking and communication related apps.

Reviewing the performance of China’s IM products from Q3 2010 to Q3 2012, key players are Tencent QQ, Ali Wangwang, Fetion and others.

As the leader for a long time, Tencent QQ keeps improving its products, user experience as well as the observation for the end user integration. And, it has realized its strategic pushes in PC and mobile internet. Use of QQ has been an inevitable online habit for most Chinese netizens.

As the major communication tool between sellers and buyers, Ali Wangwang has its deep base of users. Meanwhile, Fetion sticking to its regional model maintains its position in this market. With convenient services, low charges and good user experience, Fetion still has great potential in second and third-tier cities.