The icon for the Tencent Holdings Ltd. WeChat messaging application is seen in this arranged photograph taken in Hong Kong. (Photographer: Justin Chin/Bloomberg)

Tencent’s WeChat Giant Is Still Quick on Its Feet

(Bloomberg Opinion) -- Any thoughts that the sheer size of Tencent Holdings Ltd.’s omnipotent chat app would slow it down appear unjustified.

Monthly active users for WeChat hit 1.083 billion in the September quarter, the company said Wednesday. That’s one in every seven people on the planet. 

Tencent’s WeChat Giant Is Still Quick on Its Feet

Even more interesting is the number of users it managed to add: 102.5 million from a year earlier, the most in a year, for a growth rate of 10.5 percent. In the quarter alone it added 24.8 million.

Tencent’s WeChat Giant Is Still Quick on Its Feet

This doesn’t make up for the fact that the Chinese internet giant posted its weakest revenue growth in three years. There are many reasons for this, including a slowing economy and challenges facing its games business.

Yet it does show that Tencent’s decision to monetize WeChat hasn’t altered the product’s growth trajectory. Quite the opposite: Sales from ads on its social media platforms climbed 61 percent from a year earlier to a record 11.2 billion yuan ($1.6 billion), more than offsetting a 1 billion yuan drop in online game revenue.

It still was not yet enough to boost the bottom line. For that, the company relied on investment gains from the IPO of affiliate Meituan Dianping to increase net income 31 percent. 

Yet the figures from WeChat give hope that Tencent can keep growing revenue and driving profit even if the pressure on its games business continues.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.

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