Case Study of Tencent’s E-Commerce Strategy
Tencent’s E-commerce strategy didn’t work well. The company’s core business is QQ which is an online instant messenger. All of tencent’s other business will be rolled out base upon the QQ. They want people who use QQ can also shop online easily. So they made the strategy according to that point.
They developed E-commerce websites which made no difference with Taobao and Tmall but didn’t make them to success. Why does this happen? What’s Tencent’s strategy?
As Tencent announced to take 15% stake of JD.com, which is the largest online retailer of China, in March 2014, it also implicated the failure of Tencent’s previous e-commerce strategy. In the …show more content…
However after several years of growth, the growth rate started to slow down. In the rapid changing Internet industry in China, new company emerges and new online service attracts people’s eye. A company has to keep up with new stuff and respond very quickly to adapt to new changes. Another secondary factor is Tencent want to IPO as soon as possible. For the reasons above, it’s time for Tencent to find new business opportunity and growth point to compete in the growing market and maintain existing market share.
At that time, e-commerce industry started to show its huge potential and Tencent finally decided to invest e-commerce business around 2005 with establishment of Paipai.com, a C2C auction website.
Chinese E-commerce Market Landscape
Alibaba’s IPO is definitely the most exciting business news this year. The pricing of Alibaba’s IPO reached to around US$ 25 billion, making it the largest IPO in history. Meanwhile, Alibaba became the largest and most valuable Internet company in China.
With years of development, Alibaba has dominated the e-commerce industry. Founded in 1988 by Jack Ma, Alibaba started their business by setting up a B2B marketplace named Alibaba online. In 2003,Alibaba entered in consumer e-commerce market by the launch of Taobao.com, an C2C auction site which