Recently Tencent has made an adjustment to its organizational structure — setting up WeiXin Group (WXG) to take charge of WeChat fundamental platform and open platform as well as the development of some extended services such as WeChat payment expansion, O2O services, etc. Mr. Zhang Xiaolong has taken up the position of the president of WeiXin Group.
The previous business groups will also be kept with the new one added. Altogether, there will be seven business groups in Tencent: WeiXin Group(WXG), Social Network Group(SNG), Corporate Development Group (CDG), Interactive Entertainment Group(IEG), Mobile Internet Group(MIG), Online Media group(OMG) and Technical Engineering Group(TEG).
Besides, Enterprise Command Center(ECC) of Tencent will be called off, with its physical E-commerce services merged into JD.com and its O2O services merged into WeiXin Group. Mr. Wu Xiaoguang will continue his position of senior vice executive officer of Tencent.
Will WeChat’s Strategic Position Skyrocket after the Expansion of Business Groups?
It was in May, 2012 when Tencent made the last adjustment for their organizational structure, during which the original system of Business Units(BUs) was upgraded and replaced by Business Groups(BGs), with their services re-divided into CDG, IEG, MIG, OMG, SNG combined with the already existed research and development platform and operation platform. Meanwhile, the Enterprise Command Center (ECC) was established, concentrating on the E-commerce services. In terms of the adjustment scheme, Tencent has been paying great effort to locate their core business on six different services, including social contact, online games, network media, wireless access, E-commerce and search technique, in order to consolidate the platform strategy.
At that time, Tencent’s CEO Ma Huateng sent an internal e-mail to the staff and said,
“We hope to better tap into Tencent’s potentials and opportunities to embrace a bright future of the Internet via this adjustment. We have set a wide range of objectives, which include grasping the chances in global online games, promoting Internet development, integrating the platforms of network media, developing searching services, impelling E-commerce services and enhancing the service-creating capability. Simultaneously, we also integrate the technical engineering power so as to lead to the enhancement of our core technology and the operation of cloud platform, which may serve as a mighty support for our further development.”
Along with Tencent’s several deals of acquisitions combined with the effort to run a connection-oriented business via bonus from social networking, WeChat, which is in extreme popularity in the field of mobile Internet, is naturally becoming the priority to receive Tencent’s internal sources. Hence, this highly-applicable APP eventually gains its merited status, which will also come to Tencnent’s aid for its further development in the mobile Internet field.
What Does the Upgraded WeiXin Group Do?
According to the information from Tencent’s internal e-mail, the following plans will be implemented by the future WeiXin Group.
1. The establishment of WeiXin Group(WXG). WeiXin Group will be responsible for the fundamental platform and payment platform of WeChat as well as the expansion of payment via WeChat and 020 services, including the opening up and operation of mailbox, address book and other products. Through these approaches, a wider platform will hopefully be completed, with more values created for users along with cooperation partners.
2. The abolishment of ECC. The previous services will be re-divided, with physical E-commerce services merged into JD.com, O2O services into WeiXin Group, virtual services into CDG, movie ticket services into SNG and customer service team into TEG.
The following conclusions can be generally drawn.
1. This is both a highly-risky and highly-profitable movement, which may even reset the business center. It’s no less meaningful compared with the unrestrained gambling Google once made on Android.
2. The commercialization trend of WeChat is irresistible, which will be more and more obvious as time goes by.
3. It’s not likely for us to witness the frequent upgrading of WeChat products because it’s highly possible for Zhang Xiaolong to maintain the present values of WeChat.
4. WeChat payment and O2O services may lead to the next closed-loop for Tencent.
5. Products like mailbox, address book, etc. are able to provide a more extensive platform for WeChat.
6. It’s a promising chance for entrepreneur teams.
So, are you ready for the upgraded WeChat?