Tencent’s quarterly profit rises slowest in 2 years
Print Edition
TENCENT Holdings Ltd posted the slowest quarterly income growth in almost two years as it spent big on attracting more users to its flagship mobile chatting app and its e-commerce sites amid intense competition with Alibaba Group Holding.
China’s largest listed Internet firm yesterday posted a 12.9 percent year-on-year rise in net income for the fourth quarter of 2013, in line with forecasts.
The increase was the lowest since the first quarter of 2012, as selling and marketing expenses jumped 39 percent quarter on quarter, largely due to advertising for its WeChat app and various e-commerce sites.
“WeChat is evolving from a pure communications service into a multi-functional platform,” Tencent said in its earnings statement.
Tencent now plans to “invest in long-term opportunities such as online video, online payment and WeChat international expansion,” said CEO Pony Ma.
Tencent is leveraging the popularity of WeChat to compete with e-commerce giant Alibaba for customers. Earlier this month, Tencent partnered with China’s second-largest online retailer JD.com to further boost its mobile-based retail services.
WeChat rules over China’s smartphone screens, with a penetration rate of 76 percent in January, according to Beijing-based data firm iResearch.
Tencent said global monthly active users of WeChat rose 5.7 percent in the fourth quarter to 355 million, its slowest rate of quarterly growth as the company revised up its user numbers from the previous quarter.
Tencent’s net income rose to 3.91 billion yuan (US$631 million) in the three months ending in December, as revenues climbed 40 percent to 16.97 billion yuan.
Both Tencent and Alibaba recently said they would launch virtual credit cards that use QR codes, similar in function to bar codes that are scanned by smartphones to process payments.
However, the central bank suspended the use of QR code payments, a service analysts had said was going to be one of the most attractive features of WeChat.
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