(Yicai Global) March 26 -- Chinese internet titan Tencent Holdings Ltd. has taken frequent moves lately to acquire shares in China's well-known retail companies and formed strategic partnership with them. However, its real interest lies in neither retail nor even business, but the underlying connection. Tencent is looking to develop cloud computing, AI, and financial services from the retail industry, Tencent founder Ma Huateng said at the China (Shenzhen) IT Summit 2018 yesterday.
Tencent has invested heavily to buy the assets of new retail and carved out its position in new retail, which perplexes many people. "The reason is that we notice changes in many demands. Instead of targeting new retail, we strive to connect WeChat users with offline physical stores, thereby gaining many benefits and business opportunities," Ma said.
WeChat, an intelligent messaging and payment app and mobile social network Tencent developed, has the largest pool of users and output in China.
Tencent values connection. After users purchase goods by scanning a QR code with their WeChat app, WeChat connects them in both online and offline channels, after which Tencent can reap corresponding benefits, Ma noted.
"It was generally believed that new economy and traditional industry were mutually exclusive. In fact, they are complementary, such as intelligent retail."
Second, the focus is cloud. Cloud computing supports the real industry and empowers the traditional industry via AI or Big Data. Tencent's cloud computing business will surely benefit from a sound connection, Ma said.
Third is advertisement. Stores in the past advertised their products by traditional means of offline promotion and leaflet distribution, which were not highly efficient. Going forward, Tencent will place advertisements in social networks digitally, to gain higher advertisement revenue. It cherishes the opportunities brought by advertisements, Ma noted.
Tencent has recently bought shares in traditional retail and carried out new retail technological cooperation. Traditional retailers, including Carrefour China, Yonghui Superstores Co., Better Life Commercial Chain Share Co., Chengdu Hongqi Chain Co and Liqun Commercial Group Co., have become Tencent partners.