By THE STAR
ASIA NEWS NETWORK
Tencent has made a “breakthrough” in gaining an e-payment licence in Malaysia for local transactions, and plans a launch early next year, senior vice president S.Y. Lau said in a Reuters report.
The move pits Shenzhen-based Tencent, Asia's most valuable listed company, against rival Alibaba Group as they scramble for new growth opportunities outside China.
“Malaysia is actually quite large in the sense that we have 20 million WeChat users, huge potential, and the market is quite warm towards inter?net products from China,” Lau said.
Southeast Asia, home to more than 600 million people and some of the world's fastest-growing economies, has been a key battleground for China's tech titans fighting for deals. Ethnic Chinese make up more than a fifth of Malaysia's population.
WeChat Pay and Alibaba's Alipay, which dominate China's digital pay?ment market, have sought to expand their global footprint, although that push has so far been limited to payment services for Chinese outbound tourists. They can scan-and-pay for purchases in 34 countries or regions via Alipay and 13 via WeChat Pay, according to the companies.
Alipay's parent company Ant Financial has joint ventures in seven markets for local digital payments services, which operate independently under the partnerships' brand names.
Alibaba is looking to build a global payment system, while Tencent is more interested in generating traffic for WeChat - two different strategies, some bankers and investors say.
WeChat has more users, but Alipay's aggregate transaction volume is higher, according to JP Morgan's John Hall, though other investors note that WeChat Pay can also process large transactions if it's used on e-commerce platforms. One challenge for Tencent, say analysts, is that its success in China cannot be easily exported to other markets.
Tencent is “not in a hurry” to speed up its overseas expansion or increase the monetisation rate of its digital assets, Lau said.
“We walk our own path at our own pace ... and, to be honest, there is really quite a lot to do in China,” he added.
WeChat, which has ballooned from a messaging app to an all-in-one platform with 980 million monthly active users, could be the “killer product” to spearhead expansion abroad, Lau said, as its embedded payment function draws more services.
WeChat, with an open platform of mini-programmes, was a key revenue contributor for Tencent in the third quarter. Social and other advertising revenue rose 63 percent, while payment and cloud helped “other business” post a 143 percent jump.