Total MAU of WeChat grew by 11% year-on-year to approximately 1,098 million by the end of 2018. Around 80% of the top 500 enterprises in China are now registered as WeChatWork corporate users. Tencent’s total digital content subscription counts exceeded 100 million by the end of 2018, up 50% year-on-year. The total daily payment transaction volume exceeded 1 billion for 2018. The commercial payment revenue more than doubled year-on-year.
2018 marked the 20th anniversary of the founding of Tencent. Its total revenues went up by 32% year-on-year to 312,694 million yuan (USD45,561 million) for the year ended December 31, 2018. That was primarily driven by FinTech services, social and video advertising, and digital content subscriptions and sales.
For the fourth quarter of 2018, total revenues were 84,896 million yuan (USD12,370 million), an increase of 28% year-on-year.
- Revenues from VAS business increased by 9% year-on-year to 43,651 million yuan. Specifically, online games revenues were 24,199 million yuan. Social networks revenues grew by 25% to 19,452 million yuan, mainly from digital content services such as live broadcast services and video streaming subscriptions.
- Revenues from online advertising business increased by 38% year-on-year to 17,033 million yuan. Specifically, Social and Others advertising revenues increased by 44% to 11,846 million yuan, primarily contributed by an increase in advertising revenues derived from Weixin Moments, Mini Programs, and QQ KanDian. Media advertising revenues grew by 26% to 5,187 million yuan, mainly reflecting contributions from media platforms such as Tencent Video and Tencent News.
- Revenues from other businesses increased by 72% to 24,212 million yuan, mainly from FinTech and cloud services, as well as film and television production business.
Tencent has invested in more than 700 companies. More than 100 investees were valued at over USD1 billion each. Among which, over 60 went public. Tencent enriches its IP portfolio including games, video, music, and literature via upstream investments, and broaden user reach and engagement via investments in vertical platforms.
Tencent Social Media Updates
Total MAU of WeChat reached approximately 1,098 million by the end of 2018, an increase of 11% year-on-year. On average, over 750 million domestic WeChat users read friends’ posts on Moments per day. Approximately 80% of the top 500 enterprises in China are now registered as WeChatWork corporate users.
DAU of Mini-Programs grew rapidly and daily visits per user increased by 54% year-on-year. Mini-Programs cover more than 200 service sectors and connect with users via multiple channels, including shortcuts in the chat interface, in-app search function, and offline Mini Programs QR Codes. Daily visits to long-tail Mini-Programs accounted for 43% of the total daily visits to Mini-Programs.
Overall MAU of QQ increased to 807 million by the end of 2018. Smart device MAU was 699.8 million, up by 2.5% year-on-year. Smart device MAU for users aged 21 years or below increased by 13% year-on-year.
It further increased young user stickiness by enhancing the video recording functions and news feed features. It also launched AI-powered filters and stickers for video chat, increasing the number of short and mini videos shared by young users by over 50% year-on-year.
For QQKanDian, a popular news feed service among young users, it added a bullet chatting function within the video and enhanced video feed recommendation algorithms, boosting the click-through volume and increasing user time spent. The daily video views of QQ KanDian rose over 300% year-on-year.
Tencent’s total digital content subscription counts exceeded 100 million by the end of 2018, up 50% year-on-year. The fee-based VAS subscriptions were up by 19.1% year-on-year to 160.3 million, mainly attributable to growth in video and music subscriptions. Tencent Video expanded its subscription counts to 89 million, up 58% year-on-year, driven by premium content and cross-promotions.
Tencent released sequels to popular self-commissioned IPs, extending the longevity and monetization opportunities of these IPs. These included Candle in the Tomb Season 3 in the drama category, the Land of Warriors Season 2 in Chinese anime, and Once Upon A Bite in the documentary (whose related IP program, Flavorful Origins, Tencent licensed to Netflix for distribution outside China).
Tencent upgraded its VIP loyalty program to offer subscribers different tiers of privileges. It maintained healthy engagement trends with video views per DAU up over 40% year-on-year, as consumers watched more short-form videos.
Tencent is the leading streaming platform for sports fans in China, featuring 40 top global sports IPs, including the 4 major sports leagues in the US. It distributes sports content in live programs, news feeds, and short videos formats across Tencent Sports, Tencent News, Tencent Video, Mobile QQ Browser, and WeiShi.
Since it began licensing NBA live streaming rights in 2015, it has expanded the total audience size for NBA games in China. Over the period, average daily unique visitors per live-streamed NBA game in China have tripled.
Tencent derived 58.1 billion yuan in revenue from online advertising business for 2018, up 44% year-on-year. It received positive feedback from advertisers after the launch of the second daily ad unit for Moments, and the overall ad fill rates remained high. About 50% of Moments’ DAU were shown in the second ad unit, and Moments ad click-through rates remained at healthy levels.
Media advertising revenues amounted to 18.3 billion yuan, up 23%, for the full year, and 5.2 billion yuan, up 26%, for the fourth quarter.
Specifically, video advertising revenues increased by 34% year-on-year for 2018 and 21% year-on-year for the fourth quarter. The increase in the fourth quarter was driven by more video views and sponsorship advertising for its popular self-commissioned variety shows. The news advertising revenues picked up year-on-year in the latter half of the year, recovering from system revamp. Media feed advertising revenues grew by over 10 times year-on-year.
Revenues from other businesses grew by 80% year-on-year, primarily contributed by FinTech and cloud services.
Revenues from Tencent cloud increased by over 100% to 9.1 billion yuan for the year 2018. Paying customers more than doubled year-on-year in the fourth quarter of 2018. Tencent Cloud’s global infrastructure covered 25 regions and operated 53 availability zones as of the end of 2018. Tencent developed and launched new IaaS and PaaS products in the fourth quarter. In addition to strengthening its leadership in games and video verticals, Tencent further promoted its presence in financial and retail cloud services, leveraging our AI and security capabilities.