How to completely win over Tencent?

by geekzhang on 2013-05-03 13:30:59

How to compete with Tencent, the big penguin, is a topic that entrepreneurs have always been grappling with. Recently, Wang Shuai shared some of his views on Zhihu, citing several cases where companies triumphed over Tencent, which might provide you with some insights.Ensure your product does not engage in direct competition with Tencent's core values. Tencent's core value lies in its massive user base. Any product that tries to compete with Tencent based on user numbers will inevitably face failure.What should truly be done is to steer your product's core value away from what Tencent excels at, avoiding getting caught up in a battle over user numbers and user connectivity. Find ways to establish barriers and quickly capture the market.Here are a few examples of companies that triumphed over Tencent:1. 360When 360 Security Guard used a free model to suppress veteran antivirus software like Kingsoft and Rising, becoming China's most widely installed security client, it had already reached parity with QQ. At this point, Tencent was already destined to be unable to challenge 360's position. Users had already gotten accustomed to a particular client, and without a compelling reason, it would be difficult to switch. Currently, Tencent's only argument against 360 is that its CEO and the company itself are "uncouth."What does this indicate? It shows that Tencent's strength in human sea tactics has become ineffective because this isn't something that can be resolved through QQ user relationships. Thus, from the start, 360 avoided creating connections between different clients, keeping them independent. Once there were connections, it would mean entering into Tencent's area of expertise—user numbers and connectivity.2. Sina WeiboThis is something that should also fall within Tencent's forte, as it ultimately boils down to user numbers. However, Sina did not let this degenerate into a mere battle over user numbers. It perfectly shifted the product operation direction, turning what could have been a battle over user numbers (like Kaixin001 and other community products that lost out to Tencent due to this) into a competition over key opinion leaders (KOLs) and content.Sina quickly completed the period of user accumulation that Tencent usually enjoys by leveraging star power, creating irreversible connections among Weibo users. These connections are precisely what gives Tencent an edge in related fields—many people choose the same platform's products simply because they are already QQ users and want to maintain their large network of QQ friends. Unfortunately, the connections on Sina Weibo cannot be transferred via QQ friend networks. Tencent is unable to facilitate such a transfer. As long as these KOLs and connections remain intact, Tencent will never be able to surpass Sina Weibo.Moreover, besides having community connections, Sina Weibo also serves a media function, something that QQ platform products cannot replace. The reason is the same as for 360: one must avoid playing into Tencent's strengths.3. DianpingThis case is simpler, with similar examples including Douban and Baidu Zhidao. By using years of accumulated content as a barrier, Tencent's strategy of relying on its vast number of users becomes ineffective.4. MeituanA large number of ground-based BD (business development) personnel and offline merchant users represent something that Tencent, which is adept at fighting wars online with user numbers, products, and technology, has never faced before. Companies capable of defeating Meituan-like enterprises could be Baidu or Alibaba, but definitely not Tencent. Managing a large number of salespeople is not Tencent's strong suit.If group buying had emerged and either Baidu or Alibaba had immediately intervened, Meituan and other group-buying companies would have been put on the defensive. Unfortunately, they didn't act at the time. By the time Meituan and other companies had established their brands, it was too late. Later, Alibaba turned the tide through Juhuasuan and its investment in Meituan, quickly re-entering a battlefield it had previously lost. Tencent, however, suffered a complete defeat, both in its partnership with Groupon and its attempt with Gaopeng. Actually, Dianping would have been more suitable for this endeavor, but unfortunately, it didn't perform well enough, possibly due to operational and sales inefficiencies.PS: In China's internet entrepreneurship scene, if you're touching upon user bases, think about how to deal with Tencent; if you're dealing with traffic, consider how to handle 360 and Baidu; if you're engaging in e-commerce, think about how to confront Alibaba and JD.com.