( Beijing, 15th Sept 2020 ) Tencent Holdings has chosen Singapore as its beachhead for entering Asia. Like its rivals Alibaba Group and ByteDance, after the setbacks in the United States and India, it is vying to expand its presence closer to its base camp.
People familiar with the matter said that the management of China's largest social media and gaming company has been discussing Singapore as a possible regional hub, and geopolitical tensions have accelerated its plans. The person who requested anonymity because the discussion was not public said that Tencent has been considering moving some of its business operations, including international game publishing, overseas.
Faced with increasing hostility in the United States and other major markets, Chinese technology giants are increasingly turning to Southeast Asia, positioning the region—a population of 650 million smartphone users who are increasingly skilled—as a major battlefield. U.S. President Donald Trump has banned U.S. entities from trading with Tencent’s super app WeChat since September 20, and the company’s popular games "PUBG Mobile" and "Legend of Legends" have been used in India. ban.
Tencent said in a statement that in addition to its current offices in Malaysia, Indonesia and Thailand, Tencent will also open a new office in Singapore to "support our growing business in Southeast Asia and beyond." The company said it is hiring for various positions, including technology and business development, but did not provide details. According to Tencent's recruitment webpage, it currently has dozens of vacancies in Singapore in cross-border e-commerce, cloud computing and e-sports.
Thanks to advanced financial and legal systems, and as Beijing has increased its control over Hong Kong, Singapore has particularly attracted attention as a regional base-for both Western and Chinese companies. This city-state with a population of less than 6 million has always been careful not to stand in the confrontation between the world's two superpowers. Prime Minister Lee Hsien Loong pledged last year to maintain "friendly" relations with both the United States and China.
According to Bloomberg News last week, TikTok owner Bytedance plans to invest billions of dollars and add hundreds of jobs in Singapore in the next three years. It has also applied for a digital banking license from the central bank of the country together with Ant Group of Ali and Sea Ltd. of Tencent.
Alibaba has spent US$4 billion (approximately RM16.5 billion) to fully control Lazada, a regional e-commerce platform headquartered in Singapore; the platform aims to serve 300 million people in Southeast Asia by 2030. Alibaba also reached an agreement to acquire a half of Singapore’s AXA Building, valued at approximately US$1.2 billion (approximately RM5 billion), demonstrating its ambition to expand in this market. According to a Bloomberg report on Monday, China's largest company is negotiating to invest US$3 billion (about 12.4 billion ringgit) in Singapore-based ride-hailing giant Grab Holdings Inc..
So far, Tencent has less footprint in Southeast Asia. This online entertainment giant mainly issues orders from its Shenzhen headquarters, but some global products such as music and live video are operated in Hong Kong, and Tencent President Liu Chiping is also based in Hong Kong. The company said it stores some user data in Singapore.
In recent years, with the saturation of the Chinese market and tightening of gaming regulations, domestic growth has slowed, and Tencent has increased its horsepower to expand globally. Utilizing popular games such as Activision Blizzard and turning them into mobile games marks the company's biggest global success to date. In the last quarter of 2019, international products such as the mobile version of Call of Duty and PlayerUnknown's Battlegrounds accounted for 23% of Tencent's US$17 billion (approximately RM70.3 billion) gaming empire.
Despite Tencent's best efforts, geopolitical frictions may still hinder its international expansion. During the border conflict between China and India, the mobile game PlayerUnknown's Battlegrounds and over 100 Chinese apps were blocked by India, and the South Korean company PUBG Corp. subsequently revoked Tencent's distribution rights to the popular game in India. At the same time, Trump’s August 6 executive order prohibits unspecified transactions with WeChat and its operator Tencent, and the Ministry of Commerce has not yet decided whether gaming activities will be banned on September 20.
**Info & Image are taken online
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