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Tencent Holdings, the Chinese parent company of the wildly popular WeChat messaging app, is expanding its reach further into Southeast Asia through a partnership with Thailand's media platform Ookbee. According to a report from TechCrunch published yesterday, the companies plan to launch a new user-generated content platform called Ookbee U in Thailand this year.
Unlike Ookbee's current business, which is primarily a digital magazine publishing platform, Ookbee U will host a wider array of user-created media, including videos, music and comics.
Ookbee CEO Natavudh Pungcharoenpong told TechCrunch that the joint venture would allow content creators the option of monetizing their work. But there are signs that Ookbee and Tencent don't expect to make much money from the new enterprise anytime soon—Tencent plans to invest at least $19 million in Ookbee U, according to TechCrunch.
The partnership is just the latest move in Tencent's efforts to establish itself in emerging Southeast Asia markets in the face of slowing growth in China. eMarketer estimates that there will be 223.4 million internet users in Southeast Asia in 2017, meaning that more than one-third of the region's population will go online at least once per month this year.
In December 2016, Tencent bought out the remaining shares of Thai internet services company Sanook Online, which it then rebranded Tencent (Thailand). That gave Tencent full control over popular Thai online portal Sanook.com as well as JOOX, Thailand's top music-streaming service.
At the time, Krittee Manoleehagul, Tencent (Thailand)'s managing director, told Thai newspaper The Nation that his company already generated most of its revenue through various types of digital advertising, including branded content. That's sure to appeal to Tencent, which will control 12.4% of net digital ad revenues in China this year by eMarketer estimates, behind both Alibaba and Baidu.
Tencent's new venture will grant it access to the Philippines, Malaysia, Vietnam and Singapore, as well as Thailand—all markets where Ookbee has had success distributing digital content. They also happen to be markets where Tencent's flagship product WeChat has struggled to establish itself against other messaging apps, such as Naver Corp.'s Line.
It's likely the trend of Chinese firms either acquiring or partnering with local firms in Southeast Asia will continue unabated over the coming year, with companies like Alibaba and Tencent hoping to replicate their domestic success in these markets.
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