Why Tencent’s WeChat active user base continues to grow

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WeChat, a popular mobile chat service from Tencent

Tencent Holdings Limited (TCEHY) is a Chinese company that provides diverse services, including social networks, web portals, e-commerce, and online games. Its products and offerings include the instant messenger Tencent QQ, the web portal QQ.com, and the increasingly popular mobile chat service WeChat. WeChat is available for download from almost all mobile platforms such as Google’s (GOOG) Android, Apple’s (AAPL) iPhone, BlackBerry (BBRY), and Microsoft’s (MSFT) Windows Phone operating system. In this article, we’ll talk about WeChat, its growth over the last few quarters, and how the service makes money.

WeChat Users

Fast growth continues for WeChat

WeChat is the re-branded name for Weixin on international markets. The combined monthly active users of Weixin and WeChat continue to increase fast. The number of monthly active users has increased from 194 million in Q1 2013 to 236 million in Q2 2013 to 272 million in Q3 2013. In the mobile instant messaging space, WeChat’s number of active users is now only second to WhatsApp, which has about 450 million monthly active users. WhatsApp was recently acquired by Facebook (FB) for $19 billion, and we ran a separate series to analyze this acquisition that you can view here.

WeChat monetizes in a different way

For most Internet companies, the main source of revenue is selling online ads and subscription services. Although WhatsApp charges $1 per year as a subscription fee, WeChat has made more progress on initiatives to monetize its user base, including mobile games, advertising, e-commerce, and mobile payment services.

In the next part of this series, we’ll discuss what impact Facebook’s acquisition of WhatsApp will have on WeChat.

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