Over the last week, we’ve been keeping an eye on Tencent and Alibaba as the two Chinese Internet giants ramp up their competition ahead of Alibaba’s highly-anticipated IPO, which is expected to have a $100 billion valuation. Tencent has been holding its own with products like its popular messaging app WeChat, but it has taken several additional steps to strengthen its position against Alibaba, including a recent $195 million investment in a logistics firm.
Now the company has announced an open platform strategy to attract top app developers (h/t TechNode). This gives them access to Tencent’s app distribution channels, as well as other resources like free consulting services and co-working spaces in Beijing, Chengdu, and Wuhan. In return, Tencent can more quickly build up its mobile ecosystem to compete with Alibaba, as well as other major Internet companies like Baidu and Qihoo.
There are currently about 850,000 apps on Tencent’s platform and developers have earned a total of 5 billion RMB (about $800 million) since 2011, the company said today. With the launch of its open platform initiative, Tencent says its developers will have the opportunity to make twice that amount over the next two years. Along with WeChat, Tencent’s mobile products include messaging platform QQ, the QQ mobile browser, WeChat payment, and several shopping apps.
Tecent’s open platform initiative may also make its app distribution platform, MyApp, which it relaunched last month, more attractive to top developers. The company says that MyApp is currently ranked fourth in China’s app distribution market with a 12% market share, behind Baidu (38%), Qihoo (28%) and Wandoujia (15%).
The country’s app distribution ecosystem is very fragmented, with over 200 marketplaces, but highly lucrative for its top players. For example, this week Wandoujia announced that it raised $120 million in funding led by SoftBank Corp., while last year 91 Wireless was purchased for $1.9 billion by Baidu, the largest acquisition so far by a Chinese Internet company. So Tencent’s aggressive strategy to attract more top developers makes a lot of sense.
