Author | Wu Nannan
Editor | Hu Zhanjia
Operation | Chen Jiahui
Produced | Zero State LT (ID: LingTai_LT)
Tencent, yes A behemoth in the domestic Internet industry, every move he makes attracts much attention. Once upon a time, emphasis on scale was the main feature of the Internet era and the key to the rise of many platform companies. Today, major Internet companies, including Tencent, have been actively seeking changes in recent years—no longer obsessed with scale, but more concerned about ecological construction.
What is ecology?
Early years ago, Ma Huateng once said, "Ecology is about handing over half your life to cooperative partners." Jack Ma's point of view is: Alibaba wants to build an ecosystem rather than an empire. The empire will die sooner or later, only the ecosystem will survive; after the success of Xiaomi mobile phones, Lei Jun claimed to invest in 50 to 100 Xiaomi ecological chain companies to create an ecosystem of software + hardware + Internet services.
And who has achieved ecology? In the observation of Zero State LT (ID: LingTai_LT) , only Tencent WeChat has implemented the ecological concept more successfully.
The current WeChat ecosystem is a brand new system with different fields and functions such as WeChat payment, official accounts, video accounts, Souyisou, and mini programs. With the release of Tencent's third quarterly report not long ago, the outside world was not only surprised by the evolution speed of WeChat , but also saw the huge potential of the WeChat ecosystem.
For WeChat , this is a new beginning, and it is also a new starting point for the new growth of "middle-aged Tencent". This trend has clearer indications in Tencent's latest financial report.
On November 15, Tencent Holdings, which has attracted much attention, finally released its third quarter financial report. Data shows that during the reporting period, the company achieved 154.63 billion yuan, a year-on-year increase of 10%. Achieved net profit of 44.92 billion yuan, a year-on-year increase of 39%, and performance exceeded expectations.
The market is generally satisfied with Tencent’s report card. The three core businesses of B-side business, games and advertising have all maintained relatively steady growth. Judging from the core operating data, the number of monthly active users of WeChat continues to be stable at 1.3 billion, with a month-on-month growth rate of 0.7%. QQ has 558 million monthly active users. In terms of revenue, value-added service revenue increased by 4% year-on-year to 75.7 billion yuan; online advertising business revenue was 25.7 billion yuan, a year-on-year increase of 20%; financial technology and enterprise service revenue was 52 billion yuan, a year-on-year increase of 16%.
It is worth mentioning that this is the fourth consecutive quarter that Tencent’s advertising revenue has achieved double-digit growth, and this is obviously related to the strong performance of video accounts and mini programs. Such performance also reveals a new signal to the outside world - WeChat has gradually completed the transformation from social products to ecological construction. It also shows that Tencent’s strongest “ecological brand” is about to emerge.
So, what is the strength of the WeChat ecosystem? How did you get to the C position of Tencent? In the future, can it shoulder the heavy responsibility of taking off the middle-aged Tencent?
integrates multiple billion-level applications
WeChat ecosystem is becoming increasingly rich
has 1.336 billion monthly active WeChat , which is undoubtedly a huge traffic pool. Moreover, such huge traffic maintained a year-on-year growth rate of 2% in this quarter.
Not only the outside world is surprised by the high base growth of WeChat , but even Tencent internally realizes the importance of WeChat ecosystem to Tencent Group. According to Ma Huateng's logic of "letting the person in best condition play", the video account mentioned more than ten times in the financial report is indeed the one in "best condition" at the moment - this fiscal quarter, the total playback volume of the video account increased by more than 50% year-on-year. .
You should know that when it was launched in 2020, the video account only supported uploading short videos within 1 minute. Later, functions such as live streaming rewards, continuous wheat, and beauty were gradually launched. In just two years, the video account developed based on WeChat has established a huge user group by virtue of its social attributes.
According to data from Quest Mobile's "2022 China Mobile Internet Semi-Annual Report", as of June 2022, the number of MAUs of video accounts has reached 813 million, Douyin has 680 million, and Kuaishou has 390 million. Video accounts have successfully led the short video track.
But it should be noted that the video account at that time also had obvious flaws. The average daily usage time of users is less than one-third of that of Douyin and Kuaishou. Relevant data shows that the average daily usage time of Douyin is 118 minutes, Kuaishou is 119 minutes, and the video account is only 35 minutes. With the development of video accounts, this gap is further narrowing. By 2021, several key actions of the video account directly led to the rapid rise of the video account.
At the end of 2021, the video account ushered in its own great changes. Westlife's live concert had 27 million viewers, 170 million video views, and the highest number of people online at the same time reached 1.5 million. Then, Mayday's New Year's Eve concert live stream had 14 million viewers, and Mayday's duet with Jay Chou hit the mark. On the hot search, the topic has been read up to 200 million times.
can see that at this stage, the live broadcast of the video account is more inclined to take the emotional route. But I have to admit that this trick of video account is very effective. The popularity of several consecutive live concerts has made brands see business opportunities, and they have used concerts to build momentum for their brands. After that, live video broadcasting became standard for brand conferences. The good momentum of
continues to this day. So the outside world saw that in the third quarter of this year, when Tencent's social network revenue declined, the video account's advertising business complemented Tencent's existing advertising business, bringing incremental advertising revenue to Tencent.
And this is just the tip of the iceberg of the ecological effect of WeChat .
After more than ten years of development, the current WeChat has already formed a huge ecosystem - including but not limited to short videos, live broadcasts, mini programs, enterprise WeChat , Souyisou, etc. After a deeper understanding, you will find that these applications developed by WeChat have achieved B-side and C-side coverage.
▲Picture: WeChat Ecological Matrix
Taking enterprise WeChat as an example, public data shows that the total number of real enterprises and organizations has reached 12 million, and the total number of customers on WeChat served by enterprises through enterprise WeChat every day reaches 500 million, more than one-third of China's total population. This is enough to illustrate the widespread application and influence of WeChat in corporate communication and services.
is the earliest commercialized mini program. As early as 2020, the monthly activity of the WeChat mini program has reached 400 million; as the content and services provided by the WeChat ecology
have become increasingly rich, users have developed a habit of using WeChat With the habit of high-frequency search, the needs are becoming more and more diverse. The latest data disclosed in this financial report shows that the transaction volume of mini programs this quarter reached 1.5 trillion yuan, mainly including online and offline services in multiple scenarios such as retail, catering, transportation, and livelihood payment.
was at the WeChat open class PRO live broadcast held in January this year. WeChat Public Sou Yisou announced that as of 2022, Sou Yisou’s monthly active users have increased to 800 million, and search volume has increased by 54% year-on-year. Souyisou has increasingly become a new entrance for the traffic growth of WeChat official accounts, mini programs, video accounts, etc.
In the huge system of , WeChat and , the size of any single application is measured in hundreds of millions.
The strong social attributes of WeChat make users more sticky than other apps. For many applications, the product is first developed, then traffic is considered, and then monetization is considered. But for the WeChat ecosystem, it is based on the natural traffic advantage to develop certain functions that users want to implement within the WeChat system, and its development speed will naturally be faster.
Break the curse of "social and commercialization are incompatible"
Accelerate the commercialization of video accounts
As a national-level social application, WeChat The social moat established over a long period of time is difficult to shake.
At the same time, thanks to the rapid growth and commercialization acceleration of application components such as video accounts and mini programs, the potential for commercialization of WeChat is increasingly being seen.
Last fiscal quarter, Tencent’s advertising revenue exceeded expectations with a 34% increase. Judging from this quarter’s data, this trend is still extended. Tencent's advertising business achieved a growth rate of 20% in Q3, maintaining its leading position in the industry. It is worth noting that the pan-internal loop advertising revenue within groups such as mini programs, video accounts, official accounts, and enterprise WeChat increased by more than 30% year-on-year, contributing more than half of WeChat advertising revenue.
This is also the first time that the concept of "pan-internal cycle advertising revenue" has been mentioned. In this concept, advertising business and video accounts have become important components. But the two are different. If the advertising business is relatively traditional, then the video account can be regarded as an accelerator of its ecological commercialization process.
In the second quarter of this year, the commercialization of video accounts has accelerated, with advertising revenue exceeding 3 billion yuan in a single quarter. In the third quarter, the performance of the video account did not disappoint the outside world. Its video account playback volume increased by more than 50% year-on-year, and original content playback volume currently accounts for the majority of the video account playback volume.
The reason can be traced back to the fact that it is related to the fact that video accounts began to actively look for increments. Since last year, Tencent has placed the commercialization of video accounts in a very important position, and has successively launched a number of policies to promote commercialization such as information flow advertising, creator support programs, and Talent Plaza.
This undoubtedly forms a virtuous cycle - encouraging creators to produce high-quality original content and forming a prosperous community ecosystem. High-quality content then aggregates traffic, and the traffic attracts more brands. It not only enriches the monetization forms of WeChat ecology, but also feeds content production and strengthens the stickiness of creators to the platform.
This also breaks the perception that many people think that "social and commercialization are incompatible".
Very simple logic, no one wants their circle of friends to be filled with fake ads. Therefore, for a long time before, WeChat was very restrained on the road to commercialization and did not take too many actions. Instead of commercialization, the essence is to focus on user experience. But focusing on optimizing products and services, the super APP WeChat has been evolving. When its ecology is complete enough, it is precisely the time for it to release its ecological value.
Now it seems that on the C side, WeChat provides a wealth of social, shopping and payment services to meet the rigid needs of users. On the B side, WeChat provides enterprises with rich scenarios and digital tools to help enterprises and merchants accelerate the pace of digital transformation. Enterprise WeChat and small programs are becoming the right assistants for merchants in the WeChat ecosystem.
In a sense, the liquidity of WeChat determines the height that Tencent’s business can reach in the future. Even in the future, it also determines the height of the pricing given by the capital market.
Seize the market as an attacker
There is no shortage of war in the Internet world
There has never been a shortage of war in the Internet world.
Where the traffic is, there are business opportunities. Judging from the development trends in recent years, live broadcasting and delivery, e-commerce, and localized life can be regarded as the four major areas that attract the most attention and the highest degree of commercialization in the industry.
However, it can be seen that except for losing e-commerce opportunities in the early years and increasing its investment in smart retail in the later period, Tencent has hardly seen much movement in the above four fields.
Even if WeChat becomes a super APP and has huge traffic, the "Nine Palaces" in WeChat will only be connected to financial management, life services, transportation and shopping consumption.
As traditional advertising revenue becomes increasingly weak, it took a long time for the outside world to question Tencent's growth difficulties before WeChat made some changes.
Today, WeChat , which has been dormant for many years, has finally taken on an aggressive stance, trying to seize new incremental markets with a complete combination of advertising, video accounts + live broadcasts, e-commerce + local life.
WeChat ecology has indeed achieved this.
▲Picture: Zhang Xiaolong, the helmsman of WeChat ,
has been promoting online information flow since the end of 2022. So far, its business model has become relatively mature, supporting more than 80% of the total scale of WeChat ecological advertising. Coupled with the strong rise of video accounts. Tencent’s new growth indeed has a new starting point.
As Ma Huateng said, the core value of WeChat is to achieve instant connection between people. On this basis, the WeChat ecosystem continues to expand, eventually becoming a new business format that brings together users and business opportunities. WeChat has finally become the one in Tencent that is “in the best shape” and can play.
But does this mean that WeChat can sit back and relax? the answer is negative.
Because in these four areas, WeChat still faces many opponents.
Let’s first look at the field of live broadcasting and delivery. Taobao, Douyin, Kuaishou and even the recently emerged Xiaohongshu are all extremely strong opponents; not to mention e-commerce, although WeChat “Nine Palaces” has unique e-commerce applications such as Pinhui, but compared with the huge size of Alibaba, JD.com and Pinduoduo, WeChat may still have a long way to go; finally, looking at localized life, whether it is Midea, which has already dominated the market, Tuan, as well as competitors such as Ele.me and JD Daojia, are all extremely difficult opponents to defeat.
Therefore, although the WeChat ecology has multiple super applications with over 100 million yuan, the characteristic is that they are far away from "money". There is still a long way to go.
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