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Tencent Cloud Computing

Tencent Cloud forms an alliance to support Chinese enterprises going global

Rebbeca Ren

posted on December 2, 2022 3:26 am

Tencent Cloud, the cloud computing unit of Chinese social giant Tencent, is accelerating its overseas expansion by partnering with more third parties.

On Thursday, at the 2022 Tencent Global Digital Ecosystem Summit, the company announced cooperation with leading companies in entertainment, SaaS, e-commerce, and other fields to form an alliance to support Chinese companies tapping into overseas markets.

It also launched Tencent Cloud Media Services, a new international audio and video brand that features one-stop media solutions from PaaS to SaaS to provide global customers with solutions to lower costs, increase efficiency, and drive innovation in their businesses.

The growth of China's cloud computing market has stabilized, with Alibaba Cloud accounting for 37.8% of the market, followed by Huawei Cloud at 11.4%, and Tencent Cloud at 10.2%. According to Tencent Cloud, for the past four years in a row, it has been the top player in terms of audio and video solution market share in China.

Now, with the Shenzhen-based company eyeing global expansion to offset slowing growth in China, the cloud computing business could become a promising revenue stream.

On Nov.16, Tencent reported a second straight quarterly revenue drop, as China's economic slowdown and regulatory crackdown hit its ad and gaming businesses.

Revenue for the three months ended Sept. 31 fell 2% to 140 billion yuan ($19.8 billion) from 142.3 billion yuan a year earlier. Among them, revenue from Tencent's largest source of revenue, domestic gaming, fell 7%, widening from a 1% drop in the previous quarter.

While, the fintech and business services division, which includes its cloud computing department, grew 4% year-on-year in the quarter. Currently, The cloud computing arm operates more than 40 data centers in China and more than 20 overseas.

Last month, the tech giant reportedly began a new round of layoffs targeting its video streaming, gaming and cloud businesses. In August, Tencent disclosed its employee numbers fell to 110,715 by the end of June from 116,213 in March.

Tencent management has said they are focused on cutting costs and have shuttered non-core businesses in certain areas, including online education, e-commerce, and game live-streaming.