Tencent is shifting its focus to high-growth cloud computing
Given the growth in recent years of Tencent, the time has come for the Chinese company to further expand its trade. For this reason, as reported by Nikkei Asian Review, Tencent is planning to enter the Japanese cloud market to challenge global suppliers like Amazon and Microsoft.
Tencent is shifting its focus to the high-growth cloud computing sector amid restrictive regulations and a slowing economy, which has had a significant impact on some of its main activities, including games.
The Chinese company will face strong competition from Amazon and Microsoft
Although Tencent’s cloud arm is only the second-largest public cloud provider – with an 11% market share in China – Tencent has decided to see abroad. In fact, Alibaba holds a dominant share, estimated at around 43% in 2018, according to research firm IDC. Therefore, operations abroad could be an important initiative for Tencent.
The Chinese company, however, will face strong competition from Amazon and Microsoft, but it has an advantage over its own: it is one of the largest gaming companies in the region and the main video sharing companies in China are already using its cloud services.
Tencent aims to expand its partnership with the popular social media app Line
Therefore, Tencent’s plan to land in the Japanese market begins, which plans to reach a customer list of 100 companies within a year. Provide its services to gaming companies, video-sharing and social media as its main focus in Japan.
In fact, Tencent aims to expand its partnership with the popular social media app Line in cloud services. Line also partnered with Tencent last year to provide mobile payment services to stores in Japan.
Japan prove to be one of the most mature markets for cloud services
Tencent has doubled its cloud business revenue, accounting for about 3% or 9.1 billion RMB (about $ 1.32 billion) of its total revenue last year. It helped offset a tumultuous period in the gaming industry due to increased regulatory oversight. In May, Da Zhiqian, vice president of Tencent Cloud, said the cloud business aims to increase foreign revenue four or five times this year.
Japan, on the other hand, is one of the most mature markets for cloud services, but it is still growing. According to IDC, the country’s public cloud market is expected to grow by about 22.9% per year from 2017 to 2022. The market is expected to reach about $ 12.5 billion in 2022.