Tencent Won’t Take WeChat Global — For Now

Tencent, China’s second-largest Internet company, won’t be pushing international expansion of its WeChat social network for at least the next year, the South China Morning Port reported.

Growing globally — including expansion into the U.S. — has been the company’s plan for the last few years. But Tencent executives said last week that the company will spend 2015 focused on strengthening its position in its home market, China, with investments to improve delivery of online-to-offline services, expansion of its new mobile advertising business, and leveraging the shift in payments from the desktop to mobile devices.

Tencent also reported a 50 percent increase in Q4 profits, driven by growth in revenue from smartphone games.

But the company’s current overseas expansion approach “has sort of come to an end,” Tencent President Chi Ping Lau said. “Right now, we do have presence in a number of different overseas markets,” Lau said. “That is still growing sort of nicely, but not as fast as before.” WeChat has just over 1 billion users worldwide in more than 200 countries, but most are in mainland China, Hong Kong and several countries in Southeast Asia.

Tencent set up a U.S. office in 2013 to study the market and develop partnerships to engage more American users, but it hasn’t had an impact in a social landscape dominated by Facebook and other U.S. social networks.

Lau said the company’s new approach is to invest in WeChat in China, adding unique features and building an ecosystem that will then position it as different from international competitors when it tries going global again.

One of those features is mobile payment, which now outpaces Tencent’s desktop-based Tenpay because it offers more options, including the ability to pay utility and phone bills, make online shopping purchases and pay taxi fares. China’s mobile payment gross value is expected to grow to 11.9 trillion yuan ($1.9 trillion) in 2017, up from 1.2 trillion yuan ($193.5 billion) in 2013, according to iResearch.

Tencent is also making a hard push against its rival Alibaba, which dominates Chinese eCommerce payments with its Alipay affiliate. During the Chinese New Year holiday Tencent was able to effectively shut Alipay out of its network for traditional Red Envelope payments, and the two companies are racing for a foothold in China’s newly launched digital banking sector.