The icons for Tencent Holdings Ltd. applications including WeChat, from left, QQ, JOOX and Tencent News are displayed on an Apple Inc. iPad in an arranged photograph taken in Hong Kong, China, on Wednesday, July 26, 2017. Baidu is scheduled to release second-quarter earnings figures on Aug 16. Photographer: Anthony Kwan/Bloomberg
© Bloomberg

While Amazon — like Alibaba and other Chinese retailers — is taking the staff out off shops, Tencent has been quietly doing something even more radical: taking customers (and their cash) out of app stores.

The Chinese tech conglomerate, with activities spanning gaming, payments and movies, launched its so-called mini-programmes a year ago. Essentially apps within apps, these let users hop from, say, shopping to hailing a taxi without switching apps. More importantly, without leaving Tencent's WeChat platform.

Fast forward a year, and WeChat's walled garden of apps has bloomed: from 100 at kick-off last January to 580,000. That gives WeChat's near-1bn monthly active users ample reason to bypass the app stores run by Google and Apple, which clips some 30 per cent of the revenue at the gate.

That changes the landscape in China, but it changes Tencent too: from a killer app factory to an operating system. It's a switch that Matthew Brennan, a long-time watcher of the company, clocked before, but which, he says, became clear at this month's WeChat confab.

What does it mean? It means that in China there is even less reason to be loyal to a brand of phone — they are WeChat users, not Android or Apple — and even more reason to spend more time on WeChat and more money via WeChat Pay, both on and offline.

What it does not mean is the death of official accounts, the business accounts of brands and governments. Mini apps boast 170m daily users, or 17 per cent of WeChat's total users. The half a million or so mini apps are likewise a fraction of the 20m-plus official accounts (of which 3.5m are active).

"It's a good start," says Mr Brennan. "The road map has a long way to go. There are many things they are going to roll out this year."

Flag as Important

Upholding public interest: The takeover of Sky by 21st Century Fox is not in the public interest  since it would give the Murdoch family too much influence over Britain’s news media, the UK competition watchdog has provisionally concluded.

The Crown Jewels: Investors piled into Netflix, propelling shares 9 per cent higher in after-hours trading and taking its market value past $100bn for the first time. The streaming company had announced a "beautiful" fourth quarter  thanks to shows like The Crown. Presumably investors switched off when it warned that free cash outflows could hit $4bn this year. Lex took a reassuringly more sombre view.

Keep China unicorns private: Valuing smartphone maker Xiaomi at $100bn relies on assumptions more heroic than Hercules. There's a reason why $1bn-plus companies are staying private longer, and it makes sense for most of them to stay that way.

Forwarded

Meet Margit: The Andreessen Horowitz operating partner is one of the most skilled spin masters in Silicon Valley. Over the past two and a half decades, Margit Wennmachers, 53, has worked with, advised, or broken bread with nearly everyone who has endeavoured to build a startup. “She’s like the router at the centre of the industry,” says investor Marc Andreessen in Wired

Good morning India: Millions of Indians are jumping online to wish family and friends good morning. The frenetic matinal greetings are forcing phones to freeze up and prompting Google to investigate. The habit goes right to the top: prime minister Narendra Modi gets up at 5am to practice yoga and is known to fire off good-morning messages as the sun is rising, the WSJ reports. 

Logan Paul, explained: Vox on how the YouTuber's decision to post that video "casts a harsh light on the showy, often deliberately invasive, self-aggrandisement that has come to define prank culture on YouTube."

Tech tools you can view

OK, plasticine characters rumbling around a "prehistoric paradise" doesn't shout tech. But bear with. The film Early Man — from the Oscar-winning animator who brought us Wallace and Gromit — tells the story of a tribe of simple cavemen under threat from new, more advanced clans. They fight, they sport. Black Mirror it isn't, but like the more obviously tech world show, it oozes British talent.

Get alerts on Technology sector when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article