A tech company barely known in the western world briefly eclipsed Facebook as one of the top five largest corporations in the world.
Tencent, a 19-year-old company which now offers games and a WeChat messaging service, hit a market capitalisation value of $529.9 billion last week, overtaking its Silicon Valley counterpart at $528.5 billion.
Around 750 million Chinese internet users are flocking to online games, messaging apps and online shopping, propelling Tencent and Alibaba, another Chinese company, towards the top table of public listings. Tenent’s new landmark makes it the first company to China to enter the so-called “half-a-trillion club”.
Tencent’s stock price has more than doubled in the last 12 months, mainly thanks to its increasingly popular fantasy role-playing game, Honour of Kings, with 200 million users. It stock price has risen so much in 13 years that a $1,000 investment in 2004 would be worth $1 million today, as reported by the South China Morning Post.
Messaging and its payment service, WePay, and Alipay from Alibaba, have also helped boost the companies’ revenue.
There are more than one billion smartphones running in China, and both tech companies generate most of their revenue from mobile.
“Chinese consumers’ acceptance of new technology is faster than nearly anywhere,” said Zhao Chen, a managing partner at the China office of tech accelerator Plug and Play, told AFP.
“Even my grandpa, who is 88 years old, uses WeChat and WeChat payment.”
Other large companies in the US like Apple, Alphabet, Microsoft and Amazon may be larger but China restricts access to the internet, stunting their growth in the country.
The domination of WeChat from Tencent has staved off competition from Apple, as Chinese smartphone users have not been drawn into Apple’s hardware and app world like its traditional users.
Tencent has almost one billion monthly users who use a combination of its messaging services, social media, payment, games and publishing services.
In comparison, Facebook has just over 2 billion monthly users.
Alibaba has also benefited from China’s Singles Day, its equivalent of Black Friday for single people, who spent $25 billion on 11 November, a rise of 40 per cent from the previous year.
Unlike Facebook which generates money from eyeballs on adverts, or Amazon, which takes a cut of the price of the merchandise it sells, the Chinese companies work a different way.
Tencent sells virtual items like emoticons and outfits for the characters in its games, while Alibaba charges merchants to advertise.
Agencies contributed to this report.