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.”