Tencent grows international operations to help foreign brands make sense of China’s scale
A number as big as China’s 1.4bn population can present an opportunity, but it can also be too big to really grasp, particularly for marketers.
Tencent's Benny Ho on plans for international growth
One only has to put some numbers side by side to see that China’s definition of scale is different to many other markets. For example, platforms like WeChat and Alibaba’s Alipay are way ahead of the west for digital money transactions. During Chinese New Year last year alone, WeChat carried out more transactions than Paypal in total last year.
That’s what Tencent’s International Business Group (IBG) wants to change and Benny Ho, senior director of business development at Tencent, believes the answer is education.
“If you look at only the WeChat platform, it’s just over 800m monthly active users; it’s a huge number. Every market we go to, we educate the market and tell them the numbers and it’s mind blowing. It’s hard to imagine how something can be that big. Our role is to make something that big [more] understandable. It’s about how we boil it back down into granular bits, so that brands that are looking to market and target to an audience are able to find the people they want,” said Ho.
Last month, Tencent officially announced the opening of a new Singapore operation that would help brands from Singapore, and the wider Asia Pacific region, get a better understanding of how to target to Chinese consumers.
According to Ho, Tencent’s IBG helps brands in three ways: inbound marketing to people using its services in China, outbound to the same consumers when they are travelling in other countries and local, which means people using services like WeChat who live outside China.
The biggest opportunity in Singapore, and what Ho and his team have been working with brands and agencies around the most so far, is the inbound opportunity. Ho is telling the story of scale to brands in Singapore in an interesting way. According to Tencent, the number of Chinese tourists travelling to Singapore could reach 3m this year, representing two thirds of Singapore’s own population. Ho also said the growth in Chinese tourists was exponential, rising 55% year on year during the first half of 2016 — music to the ears of brands in a country that is flat economically.
There are nuances to this, however, as Ho says Chinese consumers tie up itineraries way in advance, so brands need to use Tencent’s data to catch people as they are planning trips way ahead of time.
“These tourists are setting their own itinerary and they know precisely what store to buy from and in what colour before they arrive; they come to buy, not to shop. This means you need to build all the brand consideration and purchase intent way before they arrive and that is part of the core service we are trying to offer,” he explained.
Another nuance, according to Ho, is the way in which Chinese consumers engage with ads and what social and emotional triggers encourage sharing and interaction. He recounted a case when Tencent launched WeChat Moments, an in-feed native ad experience. BMW in China was one of the first brands to take part and Ho said that because users understood the targeting on the ads, those that got served a BMW ad felt “they’d made it to a certain social status” and would screenshot and share the ad. The platform even witnessed people complaining that they hadn’t been served the ad.
The outbound part of the equation, where Chinese users can be targeted when they travel, will be scaled up alongside more local advertising. However, Ho said the local market wasn’t the focus for his team because it’s small, “the local opportunity is something we want to address but the focus now is to help brands and beginning to be top of mind for businesses.”
Other parts of the Tencent business, including its music streaming service Joox, are also building the user base and business outside China.