Tencent Holdings (700.HK): Weekly Report

Taobao announced the integration of WeChat Pay

On the afternoon of September 4, Taotian Group announced that it will add a WeChat Pay function to the Taobao platform, and plans to complete the signing and launch of all merchants by the end of September. At that time, consumers will be able to use WeChat Pay when shopping on Taobao. Despite this, the current experience of buying Taobao products on WeChat still needs to be improved. For Taotian Group, the introduction of WeChat Pay is an important step forward, but this is only one step in improving the shopping experience, and the cooperation between the two sides still has a lot of room for optimization. This change not only marks the end of shallow cooperation between the two sides, but also lays the foundation for deeper cooperation. WeChat Pay's access to Taobao and the Meituan applet has entered Alipay, symbolizing the further opening up of China's Internet industry. The major platforms have changed from strategic layout and guiding consumer choices to more catering to consumer needs, allowing core businesses to develop freely in competition.

WeChat update for iOS, negotiations are still ongoing

Recently, WeChat's iOS version underwent an important update. This not only improved the friend zone and live streaming features, but also gave the two sides extra time in negotiations between Apple and Tencent on the “Apple Tax” issue. Apple wants Tencent to block third-party payment links on the WeChat mini game platform and prohibit developers from using the built-in messaging function to guide users to other payment methods, so that Apple can charge 30% of the commission. At the earnings conference, Tencent management stated that the “Apple Tax” issue is still under discussion. Currently, Tencent has yet to make applets profitable through in-app transactions on the iOS platform. Management believes this is critical and expects to cooperate with Apple on a fair and sustainable basis to achieve a win-win situation for all parties.

“Pocket Pay” expanded overseas for the first time

The WeChat Palm Touch Service implementation project in Macau was officially released on the 10th. This is the first overseas application scenario for WeChat Palm Pay. Through close cooperation with WeChat Pay, ICBC Macau, and the “Galaxy Macau” integrated resort, WeChat Pay was successfully launched in “Galaxy Macau”, opening a new chapter in the international expansion of WeChat Pay by WeChat. The application of palmprint payment technology not only enhances the security and convenience of payments, but also improves transaction efficiency. With the advancement of technology, palmprint payments are expected to be more widely used in the future, especially in terms of user experience and security. The implementation of WeChat Pay in Macau has not only brought new impetus to the development of Macau's tourism industry and digital economy, but also opened up a new direction for innovation in global payment technology.

HR Assistant ceases operations

Tencent recently announced that its HR Assistant will cease operations in the enterprise WeChat app marketplace on September 30. This decision was mainly due to the good performance of the product within Tencent, but after being introduced to the market, it did not fully meet the diverse needs of enterprises of different industries and sizes. For example, there are significant differences in the needs of manufacturing and Internet companies in terms of human resources management, making it difficult for HR assistants to be widely applied. In addition, the HR SaaS field already has many mature products, such as Workday and SAP SuccessFactors, making commercialization of self-developed systems very competitive. In the current market environment where investment efficiency is low, it is inevitable that Tencent will choose to reduce costs and increase efficiency, and abolish marginal product lines that are small in market size and do not contribute much to core competitiveness.