Chinese tech giant Tencent has signalled a major shift in its strategic direction with the launch of a new cloud and smart industry unit.
Tencent unveiled plans for a major structural overhaul on 30 September that mark the biggest change of its kind in six years, and a significant change in the company’s ongoing focus.
The move will see Tencent establish a new Cloud and Smart Industry Group (云与智慧产业事业群) (CSIG) and Platform and Content Group (平台与内容事业群) (PCG) to join the existing Wechat group (微信事业群), the Internet Entertainment Group (互动娱乐事业群) (IEG), the Technical Engineering Group (技术工程事业群) (TEG), and the Company Development Group (企业发展事业群) (CDG) .
Tencent also plans to integrate its existing social media platform department (整合社交与效果广告部) and online media group (网络媒体事业群) into a newly formed advertising sales services group (广告营销服务线).
According to domestic analysts the launch of the cloud computing and smart industry unit signals a strategic shift from a focus on end-consumers to greater emphasis on business customers.
At an employees meeting held at the end of 2017 Ma said that “in terms of management, the biggest problem we face is internal organisational structure…Tencent now needs more To B capability.”
“Many people say that we only have To C genes, and no To B Genes,” said Tencent president Martin Lau. “I don’t believe this – you see the seeds of success in progress.”
According to Tencent’s Q2 financial report released in August the company previously included cloud operations under “other operations.”
“Our ‘other operations’ revenue recorded a year-on-year increase of 81% and an on-quarter rise of 10%, mainly due to our payment’s and related financial serves as well as cloud services,” said the report.
Tencent CEO Ma Huateng said that the newly unveiled strategy has the goal of actively embracing “industry integration and upgrade via the Internet, and by means of refinement and integration of social media, content and technology, provide better links and content services to customers, as well as advance the joint prosperity of the digital industry ecosystem at an even deeper level.”
