That sheds light on the huge power imbalance between Tencent and the many satellite companies in its orbit. Colin Huang, the founder of Pinduoduo, alluded to that in a 2018 interview, in which he said WeChat refused to help moderate allegations of counterfeiting on his shopping platform.
“Tencent will not die when Pinduoduo dies,” he said, “because he has tens of thousands of sons.”
No matter how dignified or modest Tencent acts, it is still a huge corporation with a profit of $24 billion last year and most of that money is invested. It picks winners and losers, but the winners aren’t always the best available, thus harming innovation and efficiency.
It limits users’ access to other products and services. Its WeChat app does not allow users to share links to goods on Alibaba’s Taobao online marketplace or short videos on Douyin, TikTok’s sister company in China. (Other platforms block Tencent services.) When the three social messaging apps were launched in January 2019, they were immediately blocked on WeChat.
Douyin’s parent company, ByteDance, shows the possibilities when a company goes it alone. In its early days, ByteDance founder Zhang Yiming received a small investment from Tencent to prop up the company but against closer ties. Responding to rumors that Tencent would invest in ByteDance in 2016, Mr. Zhang wrote that he did not start ByteDance to become a Tencent employee. He posted the lyrics of the song “Go Big or Go Home.”
ByteDance’s independence has paid off. It is currently valued at nearly $400 billion with several wildly popular online content apps, including TikTok, China’s first Internet product that has become a global phenomenon.
Tencent doesn’t just provide this industry. It has also long tried to get close to the government. Compared to the sometimes-challenging Alibaba, Tencent has long publicly emphasized its willingness to fully comply with its rules and regulations.
“Now I think it’s important that we understand more about what the government is concerned about, what society cares about, and even more compliance,” said Tencent chairman Martin Lau. during an earnings call in January. Tencent executives used the word “compliance” six times during the call.