Tencent set to hit e-commerce sales milestone in 2023, closing in on short video rivals ByteDance, Kuaishou

Tencent Holdings has quietly made inroads into the Chinese short-video e-commerce industry and is mobilising resources to build up its capabilities to take on ByteDance and Kuaishou, according to local media reports.

This year, the social media giant is on track to achieve 100 billion yuan (US$13.9 billion) in e-commerce gross merchandise value (GMV) – the total value of goods sold through its WeChat video and live-streaming channels – according to a report by LatePost on Monday.

While the e-commerce turnover on WeChat Channels is small compared with China’s two largest short video players Kuaishou and Douyin, Tencent is betting on the popularity of short videos on WeChat, an ubiquitous multipurpose app used by 1.34 billion people, to attract online shoppers.

Tencent plans to expand its live-streaming e-commerce-related headcount, widen its product categories and ask the WeChat Pay team to help build the transaction infrastructure needed to facilitate online payments, according to the LatePost report.

Fight for the short attention span heats up among China’s video apps

Tencent did not immediately respond to a request for comment on Tuesday.

The monetisation of WeChat Channels had become a main priority for Tencent this year, LatePost reported.

The Shenzhen-based company has been betting on videos as a new growth engine amid cost-cutting measures driven by a sputtering economy. Pony Ma Huateng, founder and CEO of Tencent, said in an internal speech to employees last year that short videos had become the company’s new hope.

WeChat Channels has already become a key driver for Tencent’s advertising business, which posted a 20 per cent rise in revenue in the third quarter, the fastest growth among all business segments. During the second quarter, WeChat Channels raked in 3 billion yuan in advertising revenue.

Launched in 2020, Channels has been growing rapidly in the past year. Active users on the service reached 813 million in June last year, ahead of the 680 million on Douyin and 390 million on Kuaishou, according to estimates by QuestMobile, a Chinese data analytics firm.

Tencent’s intensifying efforts could pile pressure on Douyin and Kuaishou, which are also trying to monetise short videos and live streams through e-commerce.

Privately-owned ByteDance, which operates Douyin and its international version TikTok, generated US$29 billion in revenue in the second quarter, mostly from advertising, according to a report by The Information that cited anonymous sources.

In that same quarter, Hong Kong-listed Kuaishou reported roughly US$3.86 billion in revenue and US$37 billion in GMV.

Douyin achieved 80 per cent growth in GMV last year, according to an executive in charge of the platform’s e-commerce efforts. A report by The Information put Douyin’s GMV that year at around US$196 billion.

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Tencent set to hit e-commerce sales milestone in 2023, closing in on short video rivals ByteDance, Kuaishou

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