Chinese Internet giant Tencent Holdings is expected to mitigate its recent setbacks in the United States and India, according to analysts, with the opening of a new office in Singapore, a move designed to broaden its operations across South-East Asia.
Establishing a new regional hub in Singapore is “a choice for Tencent to mitigate risks” amid trade restrictions in the US and India, said Shawn Yang, Shenzhen-based managing director of Blue Lotus Capital Advisors.
Tencent’s move to Singapore and a renewed focus on South-East Asia have come after the company found itself caught in the middle of geopolitical tensions between Beijing and Washington. The Trump administration plans to ban business transactions in the US with Tencent’s ubiquitous social media app WeChat from Sept 20.
WeChat and other Tencent apps have also been blacklisted by New Delhi, following a clash between Indian and Chinese troops in a disputed Himalayan border in June.
Shenzhen-based Tencent follows the recent move by Chinese rival ByteDance, which plans to spend several billions of dollars and add hundreds of jobs over the next three years in Singapore, according to a Bloomberg report last week.
ByteDance, owner of popular short video-sharing service TikTok, is set to partner with US tech giant Oracle Corp under a deal to keep its US TikTok operations running amid the threat of a ban by the Trump administration.
“TikTok’s setback in the US is an important case study for Tencent,” said Ke Yan, head of research at Singapore-based DZT Research. “That means it should be more forward-looking with its overseas strategy, which needs international talent and skills that cannot be found at its Shenzhen headquarters.”
“By mitigating the legal and compliance risks in the beginning, Tencent can push its international ambitions further,” Ke said.
“Tencent is expanding its presence in Singapore to support our growing business in South-East Asia and beyond,” the company said in a statement on Tuesday. The firm indicated that operations in the city state is a welcome addition to its regional network of offices located in Malaysia, Indonesia and Thailand.
Tencent, which runs the world’s largest video games business by revenue and China’s biggest social media platform, said the new office will help it “capture the potential from the rapid pace of digitisation [across South-East Asia]”, while meeting “the demand for internet-based services and solutions in Singapore”.
The company has already ramped up recruitment in the city state. A check on the company’s career site showed more than 70 job openings at its Singapore office, with positions ranging from data scientists to legal counsel. – South China Morning Post