China’s
Tencent is setting up a South-east Asia regional hub in Singapore, adding to
existing offices in Malaysia, Thailand and Indonesia.
The
Singapore base will further expand the social media giant’s global footprint, despite
recent hiccups where its app was banned in India and under threat in the US.
As part of
the expansion, Tencent is expected to shift some business operations, including
its international game publishing, to Singapore.
"The Singapore office will also enable us to
capture potential from the rapid pace of digitisation and meet the demand for
internet-based services and solutions in Singapore," the Chinese company
said in a statement.
Tencent
also intends to use its cloud computing arm, Tencent Cloud, to tap into the
growing demand for remote IT services in the region.
Kestrel
Lee, an executive creative director who has worked in agencies in China, such
as Sapient, Zeno, JUXT and Freeman, said Tencent’s move to set up a regional HQ
shows an intention not to solely rely on its China
headquarters.
“This decision
is due to an increasingly unstable reception for Chinese companies from the
ongoing trade wars, as well as political-economic conflicts with Hong Kong,
Taiwan, India, Australia and the US.
“A bunker
mentality to focus just on the China market would mean giving up all the
previous gains that Tencent has made via WeChat overseas. For Tencent, growing
overseas is a must with the China domestic market saturated,” said Lee.
Tencent’s decision to locate in Singapore follows TikTok
owner ByteDance’s decision to set up a regional headquarters in the republic.
TikTok’s rival, Bigo, earlier this year also moved its servers from Hong Kong
to Singapore.
Lee also said that Singapore’s stock
exchange provides access to both Asian and Western capital, and the country is
an ideal market for Chinese tech companies to test new markets, launch globally
as well as embark on localisation efforts. “South-east Asia is now the global
hinterland for Chinese tech companies, who have vast financial assets to invest
in overseas markets with long-term potential.”