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    Case Study

    China’s Tencent: Leading the way in monetizing platforms

    By Salvatore Cantale, Ivy Buche and Joel Barbier
    17 pages
    November 2017
    Order this case study
    Reference: IMD-7-1936

    Worldwide, there is no parallel comparison to China’s Tencent Holdings. The $22 billion tech giant is a collective answer to Facebook, WhatsApp, Spotify, Kindle, Skype, Pinterest, Apple Pay and others. This case explains how Tencent built a digital platform business from scratch over a period of nearly two decades. Undoubtedly, it gained significant benefits from being an early mover in developing a massive one-billion-strong user base on its gaming and messaging platforms. However, what is exceptional about Tencent is that it has been able to successfully monetize its social audience at scale – a tough challenge for most digital platform companies. Tencent’s double digit growth boosted investor confidence that the company would continue to tap the spending power of its users while leveraging the growth potential of its still-nascent advertising and payments businesses. Could the most valuable company in Asia, continue to meet shareholder expectations in 2017 and beyond?

    Learning Objective
    • To illustrate the organizational challenges in large, 
    • Understand the platform business model compared to the traditional pipeline business model
    • Recognize how network effects create value on a platform
    • Examine the three types of value that digital disruptors deliver – cost value, experience value and platform value
    • Comprehend the challenges in monetizing platforms effectively
    Keywords
    Finance, Gaming, Online Gaming
    Settings
    Asia, China
    Tencent, Information Technology, Internet, Information Technology, Social Networking
    2016 - 2017
    Type
    Published Sources
    Copyright
    © 2017
    Available Languages
    English
    Related material
    Teaching note
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