In the past 30 years, China has become one of the most potential and innovative markets in the World. Moreover, with the development of the Internet, there are a series of Internet companies in China had achieved great success, like Tencent, Alibaba, JD.com, NetEase and so on.
Among these companies, we already know their name and what they are good at. But, we barely understand how these companies are established and what are the stories behind them.
The Dragon Story series is a new project that Dragon Social team are planning to present. In this series, we would like to invite you with us to explore the stories behind these companies and their founders.
Also, we are extremely appreciated that you can visit our website to read our articles and leave your comment about your inspirations and thought about marketing in China.
Table of Content(Click to read)
1. The E-Commerce Modle of QQ Read Now
2. The Decline of QQ and the Rise of WeChat Read Now
The E-Commerce Modle of QQ
Tencent launched QQ and gained a huge success from it in 1999. However, Tencent soon found that they were in a pretty awkward place, they could not make much from QQ.
With huge success came with huge problems, Tencent realized that they had to change their business model. They needed to introduce a way of making the profit to QQ.
After a series of discussions, Tencent developed comprehensive changes inside QQ. And these changes helped QQ became the most profitable program of Tencent.
First of all, Tencent published their own token called QQ token Q币 and set the price to 1 RMB for 1 token. Second of all, Tencent built a series of communities based on QQ and its derivative products. For example, one of the most famous products, QQ Show, allows users to purchase different kinds of fashion disguises for their avatars. Moreover, in the beginning, Tencent provides 75% discount for users to buy QQ token.
Last but not least, Tencent also developed their own online gaming center and all games are settled with QQ token.
By the end of 2005, there were 5 million users of QQ spent 5 RMB for QQ token per month. Besides, there were over 30,000 users spent 100 RMB for QQ token per month.
QQ’s e-commerce model is successful because it seized the needs of the developing China. The traditional Chinese society demands individuals to subordinate themselves to a bigger concept, society, groups, families, etc. However, with China’s interaction with the rest of the world became more frequent, the new generation of China want to express their personality and needs.
QQ Show and QQ provides these young people an excellent chance to define themselves. Furthermore, their circles are mainly introduced and familiar with each other through their online icon.
The Decline of QQ and the Rise of WeChat
After 5 years of steady development, Tencent ushered in an opportunity to make Tencent a great company.
One of the most important changes during this time is the popularization of smartphones. In 2010, Apple launched their new iPhone, the iPhone 4.
iPhone 4 provides users with more personal designs and convenient functions. Also, with the development of data transmission technology, smartphone became a new way of access to the internet.
In 2010, Zhang Xiaolong 张小龙, entered the board of directors since his company was merged with Tencent. Zhang Xiaolong is a smartphone tech geek, he bought the newest iPhone as long as it released.
On December 2010, Zhang Xiaolong noticed an app called kiki on iPhone. Kiki is an online chatting app based on the idea of texting. Users can text others though kiki using data instead of texts.
The moment Zhang Xiaolong downloaded kiki he realized it is a great chance to develop a similar app in China. Soon he called Ponny Ma to ask for support for his new project and Ponny Ma said yes.
On January 12, 2011, Zhang Xiaolong and his team launched their chatting app, WeChat. In the beginning, WeChat only had 3,000 monthly increasing users. But, Zhang Xiaolong and his team did not stop there, they launched five improved version in the next 6 months.
In these updates, WeChat added many different functions, messenger bottle, Shake shake, and find people nearby. With the help of these interesting functions, WeChat’s monthly increasing users reached 2 million. On April 29th, 2012, WeCaht has 100 million users.
After that, WeChat developed the offcial account function. WeChat transformed from a chatting app into a business app. It has the biggest user group among all kinds of chatting apps in China.
WeChat’s success once proved that Tencent’s innovation model depends on longsighted talents and the following teamwork. This kind of development patterns helps Tencent become one of the greatest companies in the world.
After Tencent had got away from the old business model. Tencent found a unique way to make benefits from the development of China’s internet. The birth of WeChat pushed Tencent to a higher level.
It is true that the success of QQ and WeChat is mainly based on individuals’ idea and creativity. However, the foresight of Ponny Ma and Tencent’s method of creation.
In recent years, Tencent decided to enter the intelligent home and blockchain industry. It is believed that Tencent innovation pattern will help Tencent to achieve another success in the future.
In the next article of Dragon Story, we will introduce another magnate of China’s high-tech company, Xiaomi and its founder, Leijun 雷军. In this article, we will introduce the independent spirit of Xiaomi and the secret of Xiaomi’s product producing and pricing.