Who has more than a billion users and is about to overtake Facebook ?

It’s not Twitter, Google+ or LinkedIn. It’s a company that most people in the West don’t know. That, however, is set to change, with the explosive growth of China’s Tencent and its mobile messaging app WeChat...

Last week, Facebook, the current king of social networks, admitted that it’s losing teen users, and that the overall growth in its monthly active users has slowed to 18% year-on-year. This isn’t helped by the fact that it and other Western social networks are banned in China. By contrast, Tencent recently announced that WeChat’s users have almost tripled from the 85 million of the year before.

Source: WorldOfCEOs, JPMorgan, Credit Suisse, Bloomberg & company announcements

And Tencent’s reach – unlike local Twitter-equivalent Sina Weibo andFacebook-equivalent RenRen – is not just restricted to China. WeChat was rebranded from the more Chinese-sounding Weixin to appeal to an international audience, and it’s now virally coming across here. In just four months between May and September 2013, its overseas users have doubled from 50m to 100m.

So, in an increasingly crowded mobile messaging, what is Tencent and WeChat doing right?

First, it has managed to differentiate its product with some killer features that keep users coming back for more. On the messaging side, users can “hold-to-talk” and send free walkie-talkie style messages that bypass the need for voicemail. Yet what keeps its network growing are fun discovery features that can connect users locally and across continents.

WeChat has neatly fused together the open approach of social networks such as Twitter, where anyone can follow anybody, and more closed networks such as Facebook, which rely on mutual friend connections. It’s growing virally through social connection and not just social media.

For instance, the ability to identify “People Nearby” can make the daily commute or a night out with friends much more interesting. Here is a quick summary of my results when looking for other WeChat users in London...

Alternatively, you can “shake” your smartphone, and be connected with other users anywhere in the world who are shaking their phones at the same moment.

In growing its international user base, Tencent has brought on board brand ambassadors, such NBA star LeBron James, soccer star Lionel Messi and Bollywood actors Varun Dhawan and Parineeti Chopra, who users can follow and interact with.

Massive Value Creation

Shaking and tapping on smartphones are not just gimmicks: floated on the Hong Kong stock-exchange in 2004 (the same year as Google), Tencent has far outstripped Google in the rate of appreciation of its share price, up 104 times on it IPO price compared to Google’s 8.5 times price appreciation.

With a $101bn US market cap (still some way off Google’s $343bn valuation), Tencent joins Yahoo!, eBay and Amazon among the world’s most valuable internet companies.

Source:Standard Media