Tencent’s Surging Fintech Growth Driven by Online Wealth Management

Online wealth management has emerged as a mainstay fintech operation for one of China’s leading tech giants.

Fintech accounts for an increasing share of Tencent’s business after emerging as its most rapidly growing area of operation and the second largest source of revenue behind gaming and advertising.

Tencent’s 2018 Q3 report indicates that fintech accounted for around 17% of its 80.6 billion yuan in operating revenues for that quarter.

Online wealth management is a key source of growth in Tencent’s fintech operations, particularly given the rapid clip of expansion in the broader sector

China’s online wealth management sector expanded from 215.297 billion yuan in 2013 to 3.15 trillion yuan in 2017 for near six-fold growth.

In the five years since the launch of WeChat Wallet (微信钱包) in January 2014 Tencent’s wealth management vehicle Tencent Licaitong (腾讯理财通)has seen its funds rise to 500 billion yuan, while its user base has surpassed the 150 million threshold.

Tencent Licaitong launched its “Salary Wealth Management Plan” (工资理财计划) in January 2016, before obtaining a fund agency sales license in January 2018 via affiliate Tencent Tengan (腾讯腾安).

In September 2018 Tencent Licaitong also launched China’s first two online pension funds.

“At present, our fund products cover share funds, mixed funds, bond funds and indexed funds, and already fully encompass all major fund categories” said Yan Min (闫敏), vice-president of Tencent Fintech to state-owned media.

“Tencent has launched nearly 300 funds and cooperates with over 40 fund companies, mainly engaging in cooperation with the top 3 – 5% of financial institutions.”

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