Without Naspers’s $32m investment in Tencent, it’s doubtful the Chinese company would have survived. But its success can in no small part also be credited to the efforts of its founder, Pony Ma. In Influence Empire, Bloomberg journalist Lulu Chen charts...
For Naspers’s South African shareholders, based more than 11,000km from the heart of the action, Tencent seems like one of Michael Caine’s ducks, appearing to glide effortlessly and almost regally through the competitive waters. From this distance there is no sign of the intense paddling going on just below the surface.
But let’s begin at the beginning, or very close to it. In 2001, 21-year-old Naspers scout David Wallerstein was drifting around the southern Chinese city of Shenzhen, where Tencent’s head office was located, looking for investments. As Chen tells it, Naspers was on the hunt for investments following a windfall after it went public on the JSE.
It took six months to close the $32m deal that gave Naspers 46.5% of the loss-making instant-messaging company. There were a few hurdles; Tencent’s founding shareholders refused to give up control and insisted on cash, not Naspers shares. And over in South Africa, in the wake of the dot-com crash, many of the Naspers directors struggled to see the attraction of a little-known Chinese tech company.
Tencent had to anticipate changing consumer demands or risk losing out to the next hungry new player. Its market-leading messaging product was constantly being tweaked, with new bells and whistles added on a regular basis. Tencent’s local and international competitors were not impressed by the startling success of its gaming ventures. One complained it was a blatant rip-off. “Copycatting was rampant in China,” says Chen.
It’s a little disappointing to consider that so much drive and intense paddling — as well as so many hundreds of billions of dollars — were devoted to something as trivial as social media and games. But that’s business for you
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Making millions from TencentWithout Naspers’s $32m investment in Tencent, it’s doubtful the Chinese company would have survived. But its success can in no small part also be credited to the efforts of its founder, Pony Ma. In Influence Empire, Bloomberg journalist Lulu Chen charts the meteoric rise of the tech firm
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