#onlinedating | 3 Ways Tencent Is Trying to Regain Its Youth | #bumble | #tinder | #pof


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Tencent (OTC:TCEHY) owns two of the largest social platforms in China. WeChat, the country’s most popular mobile messaging app, had 1.15 billion monthly active users (MAUs) last quarter. Its predecessor, the older messaging app QQ, had 731 million MAUs.

However, WeChat’s MAUs grew less than 2% sequentially last quarter, while QQ’s MAUs declined nearly 10%. Meanwhile, both platforms face fierce competition from newer social platforms like ByteDance’s TikTok (known as Douyin in China) and Toutiao.

Image source: Getty Images.

Last September, QuestMobile reported that Chinese internet users spent just 42% of their online time using Tencent’s apps, marking a 4.2 percentage point drop from a year earlier. Meanwhile, many younger members of China’s Generation Z, who were born between 1990 and 2009, consider WeChat and QQ to be apps for older users.

Research firm Jiguang recently reported that just 15% of people born after 2000 posted daily updates on WeChat, compared to 57% of users who were born in the 1960s. Newer apps like TikTok, which has over 500 million MAUs worldwide, are exploiting that generational gap and locking in younger users.

This split, which closely mirrors Facebook‘s loss of teen users to Snap‘s Snapchat in western markets, is forcing Tencent to seek out fresh ways to regain its youth. Let’s examine three of its key strategies for regaining Gen Z users.

1. Betting on Kuaishou’s growth

Tencent initially tried to counter TikTok by encouraging different teams to launch 15 short video apps. That scattershot strategy failed, and none of the apps gained meaningful ground against TikTok.

Tencent subsequently killed off most of those projects and focused on the growth of two apps: its older Weishi app and the newer Yoo Video, which was rebranded as Huoguo (Hotpot) Video. But last November, China merged Huoguo’s team into its larger video streaming platform Tencent Video — which indicated that the app’s days were numbered.

Instead of wasting more resources on TikTok clones, Tencent boosted its investments in TikTok’s main rival Kuaishou, which reaches over 360 million MAUs. Tencent reportedly invested another $2 billion in Kuaishou last December, which boosted the start-up’s valuation to a whopping $28 billion. Kuaishou also recently launched a new children’s app, Kuaishou Qingchunji, to lock in younger users.

2. Riding the growth of the live streaming market

Tencent largely missed out on the live broadcasting craze that boosted the revenues of companies like YY and Momo over the past few years. These companies generate revenue by allowing viewers to buy virtual gifts for their favorite broadcasters.

Tencent finally added live streaming features to WeChat last year with its Live Streaming Assistant, which lets select e-commerce vendors add live video streams to their mini programs on WeChat. Shoppers who use those mini programs can purchase products without launching any external apps. This isn’t a new idea — Alibaba‘s Taobao, ByteDance’s Douyin, Kuaishou, and other platforms all encourage broadcasters to host live shopping channels which feed direct e-commerce purchases.

A live streaming video box on a laptop.

Image source: Getty Images.

Tencent is also expanding into live video game streams with its investments in China’s two most popular esports sites, Huya (NYSE:HUYA) and DouYu (NASDAQ:DOYU). It’s also a major investor in Bilibili (NASDAQ:BILI), a Gen Z-oriented platform that offers live video streams, online comics, and mobile games. All these moves could help Tencent stay relevant in the live streaming market with younger users.

3. New social networking and dating apps

Tencent launched several new social networking apps over the past year. Last summer it launched Maohu, a dating-oriented video chat app that lets users don virtual masks while chatting. Last November, it launched Qingliao, an online dating app which resembles Momo’s Tantan and Match‘s Tinder. It also started testing Youji, a microblogging platform which resembles Weibo.

The following month, Tencent relaunched Pengyou, a social network that was originally discontinued in 2007. Like Facebook’s Instagram and Weibo’s Oasis, the rebooted Pengyou offers a dominant feed of single photos, but splits those posts into three categories: friends, colleagues, and people who live in the same city.

It’s unclear if any of these new social apps will succeed, but they indicate that Tencent is eager to attract younger users with fresher features like online dating, microblogging, and photo-sharing news feeds.

The key takeaways

Tencent will remain a dominant tech company in China for the foreseeable future, thanks to WeChat, its massive video game publishing business, its advertising platform, and its booming cloud and fintech businesses. Therefore, investors shouldn’t fret too much over ByteDance’s growth or its struggle to retain Gen Z users.

Nonetheless, investors should recognize these threats and follow Tencent’s strategies for regaining its youth. If these efforts pay off, its growth could accelerate again and allay the long-term concerns about its aging audience.




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