Tencent spends more on marketing WeChat to grow internationally

Puneet Sikka - Author

Nov. 20 2020, Updated 12:36 p.m. ET

Tencent is increasing its marketing spending on WeChat

In the previous article of this series, we discussed why Tencent’s (TCEHY) WeChat faces an uphill battle in the U.S. and other international markets due to stiff competition from Facebook (FB), WhatsApp, Microsoft’s Skype (MSFT), and SnapChat. Even Twitter (TWTR) is planning to prepare to enter into the instant messaging space, and we covered this topic in our earlier article Is Twitter doing enough to counter instant messaging competition? However, Tencent has increased its marketing spending in the last few quarters and is investing heavily in WeChat in order to increase its presence internationally.

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According to the above graph, Tencent’s marketing spending as a percent of revenue has increased from 20% in Q3 2012 to 26% in Q3 2013. In the quarterly filings for Q3 2013, management explained that this increase was primarily due to increased marketing spending related to WeChat in international markets. Last year, Tencent spent $200 million on advertising WeChat overseas, hiring Argentine soccer star Lionel Messi for TV commercials.

Management commented on its marketing activities: “Weixin continued to enjoy rapid user growth thanks to its innovative features and compelling user experience, extending its position as the leading smart-phone-only community in China. We stepped up our marketing activities for WeChat in international markets and, as a result, WeChat’s user growth accelerated during the quarter. In August 2013, we introduced new versions of Weixin and WeChat which integrate with services such as online games, stickers and payment, allowing us to broaden our service offering to users and explore new business opportunities.”

Tencent is trying to leverage Google

According to WeChat’s Chinese website, Tencent is asking people who hold Google (GOOG) accounts to connect their accounts with WeChat, so they can invite their Google contacts to join WeChat. People can win a $25 Restaurant.com gift card from Tencent by getting five of their Google contacts to join WeChat. Google offers a feature that makes it possible to use Google accounts to sign in to other mobile apps. So WeChat users have been able to connect their Google accounts with their WeChat accounts.


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