The Secret Chinese Company That Owns Everything

Can I have a quick show of hands who's heard of 10cent great start if you look at the world's most valuable companies you won't be surprised to find the likes of Apple Microsoft and Google but one name does stand out 10 cent the company is worth more than the likes of Facebook MasterCard and Samsung and yet if you asked the majority of People what 10 cent does you'd be met with a confused look the truth is that 10cent does everything because whilst 10 cents mascot is a friendly looking penguin a more accurate animal to embody

this conglomerate would be a giant octopus with tentacles reaching into almost every industry you can think of all over the world in most places tensent operates from the Shadows hence why it's not a household name but whether you realize it or not you almost Certainly use products or Services tensent is involved with however in tens Cent's home country of China it's a very different story everyone is aware that tens Cent dominates their lives and that's because in China tens Cent has achieved the seemingly impossible one app to rule them all the Chinese company I'd be

most worried about is 10cent because of WeChat in China it is s of impossible to live without WeChat it dominates every aspect of life in China From banking gaming shopping social media it's so essential to their daily life one business executive compared it to me saying that it was like water or electricity you see 10cent created an app called weats that's been dubbed the everything app or the operating system of China and that's because almost all of China's 1.4 billion population use this app for an average of 4 hours every day that's more than the

average American user spends on all social media Apps combined and the reason people in China use WeChat so much is because it's basically every app you can think of rolled into one it's essentially Facebook PayPal WhatsApp Netflix Google Spotify Uber Yelp Tinder Zoom YouTube deliveroo Amazon and lots lots more all in one single app now there's no doubt that this is extremely convenient everything connected in one app and one profile you pay your bills through it call your friends through it and Essentially live your entire life through it however one single company having access to

literally all your data every aspect of your life from your exact location to your entire Bank history to every message and call and search you've ever made it's a lot and then it gets worse when you realize that the line between where 10 cent ends and the Chinese government begins is blurry meaning the Chinese Communist Party known as the CCP has access to all that Information as well making WeChat one of the most powerful surveillance tools ever created not just that but private messages and images that are sent through 10 cents apps like WeChat are

scanned to see if they need to be censored if you say anything that the Chinese government doesn't want you to the best case scenario is your message just doesn't get delivered worst case scenario is you end up in jail or simply disappear for example one citizen Literally just made a light-hearted joke to some friends about a government official and soon found himself jailed for a text and it almost seems like the CCP wants people to be aware of this in order to prevent them even trying to say anything they don't like in the first place

because the Chinese government has even openly confirmed that it can access deleted Weck conversations as well without permission from the user or courts now of course as we know from Snowden's leaks countries surveilling their citizens with technology is certainly not just something that happens in China however China has definitely taken it to new levels Amnesty International is an organization focused on human rights and carried out a report of how messaging apps handle their data and they concluded the worst offender by far was 10 cent the only company to literally score zero out of 100 for

its treat M of data this is Because of massive problems about transparency and what they do with data where it ends up and not even denying that it gives the CCP a back door to access all encrypted messages now of course pretty much all Chinese companies have to have some ties to the CCP in order to be allowed to succeed but 10 cent is unique because it has been allowed to monopolize entire Industries in China and use brutal tactics to wipe out competitors without any interference From Regulators but in exchange for that freedom someone would

say as a result they've been turned into a weapon for the Chinese government it's estimated the CCP has thousands of members inside tensent including party officials on the 10cent executive board who can influence decisions for example during the initial covid outbreak the Chinese government used WeChat for population control assigning color codes to determine whether people were healthy and what They were eligible for like if they were allowed to leave their homes or not another example is ordering 10 cent to change their games to conform to Communist Party values as well as making add facial recognition

to their games so kids can only play them for a Max of 90 minutes per day but before you think this doesn't affect you think again the vision of 10cent is to connect people and connect everything you see once 10cent built their Monopoly in China They began expanding abroad and essentially went on one of the biggest shopping spree in history they've invested heavily in companies like Reddit Tesla Discord Spotify Snapchat and Universal Music and those are just a couple of the many hundreds of companies outside of China that tensent are now involved with they are

also the largest gaming company in the world with Revenue significantly higher than any competitor this is particularly crazy when you Consider that gaming is just one of countless different Industries T and operates in and yet their gaming division alone is bigger than the entire company of Nintendo or EA and the reason 10cent is so dominant in gaming is because they own 100% of Riot games creator of League of Legends 40% of Epic Games creator of fortnite not to mention stakes in Ubisoft Activision Blizzard and so many more of the world's most popular games the same

is true in other Industries for example 10 cents payment division is nearly as big as PayPal's entire business and it's reported WeChat pay generates over 1 billion payment transactions per day more than visa and MasterCard combined they've also got 10-cent music they're huge in Esports and are even now involved in making Hollywood movies like Men In Black I think if you look at and uh music the company makes about 400 million 500 million in profit in other words it's Hard to fully grasp just how large 10cent is but it's only recently that the West has

started to realize the influence 10cent andless China actually have one small example was how blizzard the World of Warcraft Studio partially owned by tenens Cent banned a gamer who endorsed the pro-democracy movement in Hong Kong in other words China seemed to be using 10cent as a weapon to influence decisions outside of China this caused many people to ask how is this one Chinese company seemingly now dictating what people in the US are allowed to say the same was true with the NBA youj you see 10c video has a deal with the NBA to stream their

matches but in 2019 Daryl Mory manager of the Houston Rockets tweeted Fight For Freedom stand with Hong Kong in response 10 cent said they would not be streaming any Rockets matches in future so soon after this the manager was forced to delete delete his Support for Hong Kong Backtrack on his stance and apologized for his inappropriate tweets players then came out stating that they love China yeah we apologize um you know you know we love China we love you know playing here so whilst in recent years some have started to wonder if China could use

10cent to influence things abroad the answer seems to be that they already are multiple governments from the US to India have now called WeChat a Security threat and others suggested it's a monitoring weapon in your pocket and turning now to the major decision by the Trump Administration Banning the popular social media apps tick talk and WeChat from us app stores US president Donald Trump issued an executive order last month targeting the app as a security threat but what's perhaps Most Fascinating about tensent story is that you can look at it in two ways on one

hand tens Cent is one of the greatest Business success stories ever at one point the company had only $1,000 in its bank account and so the Journey of how a group of friends turn their struggling startup into one of the world's largest companies is remarkable and filled with useful lessons and genius business strategies what they have achieved is ridiculously impressive and there is definitely an argument that tens Cent has been unfairly caught in the middle of a political storm that they didn't Want any part of but on the other hand tensent is often surrounded by

controversy this includes their brutal monopolistic practices to crush any competition their blatant plagiarism of just ripping off other companies and apps their extreme censorship and violations of privacy and freedom of speech accusations of poor working conditions and the fact multiple countries now see it as a national security risk because of its close ties To the Chinese government but I do want to be clear to just dismiss 10cent as a puppet of the CCP is unfair in fact right now the Chinese government is actively hurting 10cent business and is responsible for wiping hundreds of billions of

dollars of 10 cents valuation which of course just raises even more questions why would the CCP be damaging one of its most useful assets as you can see the 10-cent story has a lot of different pieces to it there is Both good and bad and several plot twists along the way honestly I've covered lots of different business stories but tensent is one of the most fascinating in this video we're going on a journey through 10 cents insane history to find out the truth behind this gigantic business Empire a company that influences so much and yet

is so rarely discussed how did they get here what are they planning next and what does it mean for all of us so buckle up Because I assure you the story of tenent is going to be a wild ride [Music] [Music] if you walked past Elon Musk Jeff Bezos or Mark Zuckerberg I'm pretty sure you'd notice but when it comes to 10 cents founder and CEO despite running such a gigantic influential Corporation it's quite likely you've never even seen him before he goes by the name of pony in English our next guest is the founder

And CEO of 10cent Pony however this is his actual Chinese name but since in English his surname translates to horse he goes by the name Pony as a bit of a joke the fact we don't usually hear much about Pony Mar or know much of his story is mostly by Design tensent tries to walk the tight RPP of keeping both China and the rest of the world happy and since that's very difficult to balance he opts to not speak out publicly much at all it's better to just say nothing Rather than cause controversy and headlines

the other reason we know so little about Pony is that unlike his arch nemesis Jack Mah the founder of China's other dominant company Alibaba Pony is introverted and simply doesn't like being in the spotlight and this has always been the case growing up Pony Mar was a quiet kid who mostly went unnoticed throughout his sco is the only time he did get much attention was when he hacked into his University's Computers and got a reputation as a great coder in fact for his university thesis he created a software program that could help forecast stock price

movements and this software was so useful but at age 22 he sold the program to the company he was interning at for a price of about three times his annual salary by the time Pony graduated from college the internet was in its very early stages and whilst of course it was very primitive back then Pony was Excited by its potential and began thinking of business ideas to try and capitalize on this exciting new internet technology however although Pony was undeniably a very talented and hardworking programmer the beginning of his future business empire did not come

from some revolutionary idea that pony himself gr you see it's time for the first uncomfortable truth about 10 cents the business was started by just ripping off someone else's idea and as we'll Soon see that has remained a fundamental part of 10 cents business strategy ever since but it all began when one day Pony was browsing online and stumbled across something called icq an internet chat platform that at the time was pretty groundbreaking it was basically the first mass adopted instant messaging system on the internet letting any two people online have a private conver ation

in real time so in 1998 Pony and his tent co-founders which was three of His friends from school launched their own duplicate chat service that was more catered to the Chinese market now admittedly it was a common practice in China to just clone popular Western Services for example Buu copied Google Alibaba copied eBay webo copied Twitter and so 10cent copied icq but just to demonstrate how much of a ripoff 10 cents chat product was of icq they literally called their service o IQ so They just added the letter O to the name Initially though 10

cents future looked Bleak they got the cheapest office they could in a chaotic and Loud neighborhood full of Street vendors pedling knockoff Electronics they were crammed into a tiny room which bizarrely had a disco ball hanging from the ceiling to be fair though once tenson had set up their internet chat service oq they did a great job of tailoring it more towards the Chinese market one simple example of this is that because download speeds in China were so slow in the '90s it would take ages for people to download most chat programs whereas 10cent made

sure their chat software had a much smaller file size so downloaded much faster also unlike other chat software where you could only message people you already knew Pony made it so that on oq Strangers could connect if they wanted to as well thus laying the early foundations of it becoming a social network at first though the problem was That very few people even knew oq existed Pony himself later admitted when users first came nobody was in the chat room I had to keep them company and talk with them sometimes I had to change my profile

picture and pretend to be a girl so you had the CEO talking to random people in the chat hoping they'd like the service enough to keep using it now to be fair this was actually more of a side project for 10 cent in the early days Pony Initially spent more of his time trying to work on a software that connected Pages or bleepers as they were also known to the internet unfortunately that idea was going nowhere and so Pony was relieved when one evening he logged onto their chat app and saw a spike in users

2 months in they'd hit 500 users and from that point the user number began to rise faster and faster each month as people in China shared oq with their friends and family before long the chat App was growing so fast that it became 10 cents only focus they ditched the pager idea completely and went all in on oq thousands of users were now joining every day and so you'd think Pony would have been thrilled but in reality he was more stressed than ever that's because there were three major issues Number One servers in China were

expensive at the time and they kept having to by more which was particularly problematic because of issue number two Kent wasn't Making any money oq was taking off like a rocket but it wasn't monetized and so they were actually just losing money the more people used it but then worst of all issue number three one day in 1999 about 9 months after starting oq Pony received a thick envelope in the mail from America it was a letter from the lawyers of AOL a big American company who owned the original icq chat software that 10 cent

had copied it said they were suing tensent for Violating intellectual property laws and demanded tensent stop using the name oq immediately by this point oq had hit 1 million users and was growing rapidly but 10 cent didn't have the money for a lawsuit they barely had any money at all in fact most of the small 10-cent team were doing freelance work on the side to try and raise enough money to pay the rising server costs they were all working crazy hours and getting very stressed out So eventually Pony decided To try and sell the company

ands surprisingly though given the lack of Revenue and legal issues nobody wanted to buy it people just kept saying they didn't see how it would make enough money to be sustainable but then Pony learned about the concept of venture capital investors who were looking for companies that weren't necessarily profitable yet but had huge future potential as soon as Pony learned about this concept he immediately began Contacting VC firms and managed to get a meeting with China's most well-known Venture Capital fund called idg capital in the pitch Pony used an unusual tactic brutal honesty he told

idg if you don't fund us right now 10cent will probably die and even if you do give us the money the future is still uncertain Pony also admitted they weren't fully sure how they would even monetize their chat software but what he did know is that millions of Chinese people liked using It and that there could be real value there now you'd think that this would be pretty underwhelming to investors but surprisingly idg Capital agreed to invest in 10 cents years later one of idg's decision makers said that Pony's total honesty rather than the typical

overconfidence and false promises that Founders offer make is actually what made him think Pony was a really downto earth guy who could be trusted which encouraged them to invest so idg Capital Along with another VC firm together invested $2.2 million for 40% of 10 cents business it's not an exaggeration to say that if the deal had not gone through right then 10cent probably wouldn't exist today not only were they nearly out of money but the dotom bubble burst in 2000 an investment in cash burning internet businesses all but dried up luckily for 10 cent though

they'd got the money just in time and so could continue operating there was still The lawsuit threat from AOL to deal with though and so Pony was forced to shut down the OIC Q domain names and Rebrand their chat app as something else eventually Pony decided to rename it as simply QQ so their legal trouble was sorted they had enough investment to carry on running and their user number continued to grow at an insane rate after hitting a million users in year 1 they reached 50 million in year 2 as more and more people in

China shared the Software with other people so they could chat tensent had perfectly adapted the original icq chat to fit Chinese consumers better now just one issue remained making money whil you think having lots of users would make monetization easy back in the early 2000s on the internet in China it actually wasn't Pony tried multiple monetization strategies including placing banner ads on QQ selling qq's chat software to companies and charging A small membership fee to use the software all of these failed and in fact the membership fee in particular backfired horribly people in China hated

the idea of paying a fee to use any internet service and so this allowed some competitors to gain market share from 10 cent on qq's third birthday in 2003 Pony scrapped the subscription fee and made QQ completely free again but of course they had to make money somehow luckily it was around this time that Some 10-cent employees had discovered a Korean website called SE club.com which allowed people to create personalized avatars with customizable appearances and clothing it seemed really popular popular in career so tensent decided to once again copy a popular feature from elsewhere and

launch their own avatar feature inside QQ called QQ show thus giving Chinese citizens a way to express themselves by having their own unique character to represent their profile for A very small fee you could buy designer clothes accessories and styles for your character whilst buying things for your avatar was cheap equivalent to just a few cents it cost 10 cent nothing and those microtransactions added up fast this feature quickly became very popular especially amongst younger users your avatar became a signal of your status and the feature worked particularly well because many people had started using

QQ as a dating app adding strangers Randomly and chatting with them and so the Avatar function was a way to express some personality and in some cases established themselves as being rich by purchasing the most expensive Avatar items finally Pony could relax a little 10- cents chat software Q was now making money by selling these virtual items and they soon crossed a 100 million users in China Pony even met his future wife through QQ for 3 months he was chatting with a girl on there before they met in Person funnily enough when they first started

chatting on QQ she had no idea she was speaking to the founder of the service she reportedly messaged him asking who are you and he wrote back I'm penguin dad a reference to the fact that tens cense mascot was a penguin but she just replied then I'm penguin mom their relationship began from there and 6 months after meeting in person they were married unfortunately for Pony that happiness would be shortlived as little Did he realized his company was about to go to war and their opponent was a hundred billion Corporation Called [Music] [Music] Microsoft in

2004 a chat service called MSN enter the Chinese market as a direct competitor to 10 cents QQ MSN was run by Microsoft which was terrifying for 10 cent as Microsoft had such vast wealth and resources and Microsoft had decided to double down on its efforts in China Given it was such a massive market and since their chat service was much more professional and streamlined than QQ MSN quickly attracted businesses and students QQ seemed more like a casual chat application but less of a serious communication tool on the other hand MSN was becoming more widely used

in offices in China and thus it was quickly eating into qq's market share tensent really just had one big advantage over Microsoft though msn's decision- making Was much slower because of their bureaucratic corporate hierarchy where every big decision had to be signed off by their American headquarters for example it was actually msn's China team who suggested the idea that users should be able to still receive messages even while offline and be able to see them when they came back but the suggestion never went anywhere meanwhile tensent managed to incorporate the same feature in just a

couple of weeks and it proved To be hugely popular and so even though 10 cent had grown into a fairly big company by this point they still acted more like a scrappy startup this offer meant their apps were a bit buggy and had some issues but they were able to launch new features really fast get real-time feedback and just fix issues along the way with very regular updates another issue for Microsoft MSN chat was that initially they kept all their data back on us servers which meant 10cent QQ Chat service that ran on local Chinese

servers was much faster to use but the biggest mistake for MSN was that they later Incorporated their MSN chat into their platform form MSN live and this just confused users as now to use the chat they had to go to a website instead and it was just unnecessary extra steps ultimately despite having greater resources MSN lost the fight to 10 cents in truth China hadn't been a main priority of theirs Microsoft had bigger Battles going on elsewhere like with Google in the US whereas 10cent at the time had just one Focus which allowed them to

go all in but this victory over Microsoft was a critical tourning wa for 10 cents as after defeating a much bigger company they went on to completely dominate the chat Market in China in half a billion users in late 2005 and it was this dominance that would be the springboard for all of Pony's other plans you see Pony had a Vision of being much more than just a popular chat platform but instead a whole network of integrated internet services as this would make it much harder for anyone else in the future to try and compete

with them and so tenset began adding several other features into QQ like the ability to access news and after seeing how quickly tencent was growing a South African company called naspers had decided to invest $32 million in tensent and become their Largest shareholder in fact they still are to this day meaning NASA's got one of the highest investment returns ever but back when they first invested in 10 cent this gave Pony the influx of cash you needed to begin the next stage of his plan and this is where things start to get crazy [Music] tensent

had realized that a lot of people used QQ whilst playing games as people would chat with their friends Whilst they were all playing so tensent decided the next logical place for them to expand was into both acquiring and building games of their own since they already had such an active user base within just a year of integrating games into QQ tensent had added another $50 million in annual revenue now 10 Cent's quick expansion into the gaming Market was aided massively by the fact they were a Chinese company as you may know the internet in China

is restricted by The great firewall which stops people within China accessing many websites the Chinese government don't want them to including the likes of Facebook and YouTube and that's largely because it wants to censor what its citizens can see but it's also because it wants to promote local Chinese companies instead and as a result in many Industries China has a policy where foreign companies have to partner with a local Chinese company to be able to sell their Products or services in China and so this meant 10 cent could simply team up with makers of successful

games in other countries and then adapt and distribute their game to the Chinese market these licensing deals allowed 10 cent to make a lot of money quickly without even having to produce any games themselves they could just partner with makers of popular games in other countries bring their game to the Chinese market and promote them to their massive QQ user Base since inational companies were reliant on finding a Chinese partner if they wanted to enter the Chinese market tensent knew they had a lot of Leverage and an unfair advantage in negotiations if game makers wanted

to bring their game to China's gigantic population they needed a Chinese partner and better than 10cent given their huge user base one example of 10 cent power is illustrated by an anecdote from the American video game developer Zinga when they were Trying to agree a deal with 10 cents an ex singer employee said negotiations go on for months and months and then by the time you get to the redline stage in the contract all of a sudden at the last minute they change everything it's a business tactic they use to wear down their partner but

as well as licensing games for the Chinese market tenen did make some of their own games too normally by just replicating fairly simple games that were working well Elsewhere for example QQ speed was very heavily inspired from Mario Karts this of course was even more lucrative than licensing as it meant they kept all the money for themselves and it was low risk as they were using Game Concepts that were already proven to work well abroad and just making their own version of it for China however since China had a major lack of digital piracy enforcement

tensent realized if people weren't paying for games up front and were just Sharing them for free why not make the games free for everyone and make money through in-game sales instead like paying for extra lives features and upgrades nowadays of course microtransactions within games are extremely normal but 10cent were definitely one of the first to push this so heavily and it worked 10cent Revenue continued to rise with monetization now going so well tensent ipoed in 2004 on the Hong Kong stock market which Provided them a warchest for tensent to invest heavily in more expansion and

growth however that growth would only be possible thanks to tensent culture now most Chinese tech companies are notorious for their long work hours the schedule is often referred to as the 996 schedule meaning you work 9:00 a.m. to 900 p.m. 6 days a week and that includes hours and hours of unpaid overtime that's illegal but the government turns a blind eye because long hours like that Built China's Tech Giants his day at one of China's Tech Giants started at 8:00 a.m. and should have ended at 8:00 p.m. but he says nobody wanted to be the

first to leave or you'd be labeled unprofessional [Music] and certainly at 10 cent the culture was very demanding with internal meetings often going on past midnight but tent also had a strict hiring process as Pony believed that 5 a players were better Than a team of 50 who weren't fully committed as even one person lowering the standards and not working hard can reduced team morale and drag down everyone else to their level not just that but one of the key culture decisions Pony made after their battle with Microsoft was to ensure that almost everyone in

the business had freedom to pitch new ideas and work on new projects so rather than having a specific research and development division Everyone was expected to innovate as a result the whole of 10 cense Workforce were actively monitoring the market for new apps and ideas they could essentially rip off and incorporate into QQ even Pony himself said in an interview at the time I don't blindly innovate the smartest approach is to learn from the best examples and then tried to surpass them Pony pointed out that this is exactly what American Tech giants like Microsoft and

Google did as Well but in China it really was the wild west where anyone could just blatantly copy anyone else with no protection and to be fair this wasn't One Way whil 10cent copied others others copied 10cent as well but because 10 cent QQ software gave them access to hundreds of millions of Chinese users it meant they could then divert that attention to the new features they launched giving them a huge Advantage before long tensent had a notorious reputation as a killer copycat At one point its reputation fell so low it was embroiled in a

full-blown media controversy and Pi openly accused and scolded it for violating copyrights and 10 cents reputation took an even bigger hit after a battle with a security company called Ki that offered a popular antivirus software called 360 Safeguard tensent had decided they wanted to get into the security Market as well so they' created their own very similar version of ki's security software called QQ doctor and because they could simply integrate it into the already very popular QQ software they almost immediately gained a 40% market share in China so Ki who decided to fight back by

launching a big media campaign accusing tensent of spying on its users saying tensent accessed user data and files on people's devices it didn't have permission to tensent sued Ki as a result but in the court of public opinion this backfired as it looked like A bigger company just trying to silence a smaller company with legal threats rather than actually trying to demonstrate their innocence and then tensent made an extremely bold move they informed you users that ki's software was not compatible with QQ meaning users had to choose either keep ki's security software or keep their

beloved chat app that connects them to all their friends and family you couldn't use both if QQ detected Ki 360 Safeguard on your system QQ stopped working but tensent gamble paid off tensent knew that ultimately most users were too connected to Q to abandon it so Ki were mostly the ones who lost users instead people just switched to qq's antivirus software which was very similar anyway it was yet another victory for 10cent and proof of how easily they could launch a new internet service and almost immediately become the market leader in the media headlines such

as 10-cent Empire out of Control started to appear as this was clearly monopolistic to essentially ban your users from using a competitor's product but interestingly the Chinese government showed no interest in intervening they seemed quite happy to sit back and let 10cent grow only later would it become clear why but with no regulations or laws to stopped them between 2005 and 2010 10 cense Revenue went from $200 million to $2.9 billion however as tensent continued their Expansion in China opening up more internet services and the leveraging qq's massive user base to make them popular eventually

they realized a new strategy might be needed for a while tensent had simply been trying to work on everything competing in loads of different sectors and making clones of all different internet services and just seeing what worked basically they tried to compete everywhere rather than playing to their own strengths and Really 10 cents biggest strength was in leveraging its QQ chat platform with hundreds of millions of users to direct traffic to other places like they did with news and gaming so as their copycat reputation got worse one 10cent executive said there's a lot of great

entrepreneurs outside and if you turn every single one of them into your enemy it's not a good thing as a company you can't actually hire those entrepreneurs so what are you going to do investment Is actually the best way to get a piece of their action thus tensent began shifting its strategy towards investing in Chinese companies instead of always trying to directly compete against them and crush them for example tensent paid $448 million for 36.5% of China's thirdd largest search engine and merged their own search product into that rather than competing 10cent was now willing

to back a champion rather than do everything itself essentially 10cent new strategy Was almost to become a startup incubator it would invest in businesses and take some of their equity and then build an ecosystem of connected companies that it could help grow using its existing user base and infrastructure another example was when 10cent combined with China's second largest online retailer jd.com tensent had no real expertise in e-commerce themselves and so they figured it made sense to just back one of the most prominent companies in in The industry in exchange for equity and then leverag their

own internet traffic experience and capital to help the company they backed succeed as a result tensent became a king maker a support from tensent could help ensure a company was successful and from tens Cent's perspective it meant they massively reduced operational complexity as they weren't doing literally everything themselves anymore before long 10cent was one of China's biggest investment Companies and QQ was now much more than a chat software it was a portal to many other internet services that tens Cent had either created or invested in and thus QQ seemed Unstoppable but interestingly the one app

that would eventually surpass QQ was also created by 10 [Music] [Music] cent 10cent had already succeeded with q's desktop chat app which had now Evolved into a website portal with online games and other internet services but in 2010 mobile internet was beginning to rise in popularity very quickly many Chinese people began using a smartphone but not a computer Pony was paranoid that with the switch to mobile happening a new startup could displace their dominance so he decided 10cent needed to create this new startup themselves internally within 10cent Pony created three separate teams to work on

A new mobile messaging app meaning they were competing against each other and also competing against 10 cents desktop app QQ this practice of teams in internally competing at 10 cent is normal in fact the culture of 10cent has been described as a shark wom referencing how some unborn sharks cannibalize siblings in the womb to ensure their own Survival so basically rather than put all their eggs in one basket multiple teams at 10-cent work on A concept like a new mobile chat app in this case and the best survives or as Pony himself has said you

either wait for someone else to kill you or you do it yourself first so tent began work on their mobile chat app that they wanted to essentially be a clone of WhatsApp and kick a free mobile chat app where people could send messages to their contacts using Wi-Fi or mobile data interestingly tent had actually tried to buy WhatsApp for $10 billion rather than Starting a new at from scratch but because pony m had to have back surgery the discussions got delayed in that time Mark Zuckerberg swooped in and bought WhatsApp for $19 billion and some

think the possibility of 10-cent buying WhatsApp prompted Zuckerberg to close the deal so quickly either way after the WhatsApp deal fell through tensent decided to pursue their own chat apps instead and in January 2011 they launched we chat although in China it Has the name wayin unlike QQ which had been developed for desktops WeChat was specifically made for mobile despite this the Apple was not a massive hit right away but it did start to gain Traction in China when tensen added a feature called push to talk which allowed people to easily record a voice note

and it would convert what you said into a text message this was immediately a very popular feature but once again it was copied from someone else an app Called Talk boox you see at first tent had offered to buy Tor box but whilst negotiations wrong going tensent just replicated talk Box's app within wichat by themselves and inevitably beat talkbox with their Superior resources in later years companies in China would learn that an offer from 10 cent was actually an offer you couldn't refuse you either lose your company by selling to them or lose your company

by them copying and crushing you at least if you Sell your company you make some money when Pony was asked about this at a conference in China he said in America when you bring an idea to Market you usually have several months before competition pops up allowing you to capture significant market share in you can have hundreds of competitors within the first hours of going live ideas are not important in China executioners so WeChat was now gaining momentum in China and just like QQ tenson did not want to Keep it as just a chat application

in fact because WeChat was a mobile app that people would always have with them wherever they were Pony quickly realized that the amount of services they could connect to WeChat was seemingly Limitless for example within wechat's app Tenten introduced a feature called moments basically their version of Facebook or Instagram a real-time social media feed posts images and articles following the success of this they added A blogging service called Public Accounts so people could write articles which could then be shared on moments there was also official accounts allowing Publishers to distribute content and businesses to distribute

products and services this would be like the equivalent of uh following their newsletter for example but nobody in China really uses emails very much so they're more likely to use WeChat to follow brands that they're interested in By 2012 WEA add 100 million users remember it only launched in 2011 thus making it the fastest social media growth in history taking only 433 days to hit 100 million users for context it took Facebook around 5 Years A year later in 2013 WeChat was at 300 million users but the key to wechat's eventual dominance in China was

that tensent just kept bundling more features in this same app for example they added quirky features like drift bottle which was a Service within WeChat to help people find new friends or dates you essentially put either a voice or text message in a virtual bottle throw it into a virtual and then another random user picks it up and decides whether to reply to a message or throw it back for someone else to get this actually became a really popular feature with many Chinese people making genuine friendships and relationships through it and for some people it

became a hookup App tensen also created friends nearby for a similar purpose which was like an early version of Tinder and helped WeChat grow even faster but one of the most crucial developments for WeChat came about kind of by accident you see in China it's a tradition that during the Luna New Year people charitably give away red envelopes and packets containing money so weat decided to create a red packet function within their app so people could digitally send Red packets to people which transferred real money to their accounts during that holiday over 75 million red

packets were sent via WeChat this led 10cent to a clear realization mobile payments were the future this feature that was meant to be a fun little temper thing over the holidays ended up leading 10cent to create WeChat pay their mobile payments platform to digitally transfer money before long wechat's wallet feature was not just used to send payments to other People but as a way to pay for things in shops and in fact basically anything where money needed to be sent or paid rather than carrying around a credit or debit card it was easier to just

use WeChat since their Bank details were already connected they won't ask for cash because nobody's really paying for anything with cash nowadays in China in fact even if you give them cash they might not actually be able to accept it once again this may seem like an obvious Feature today but back in 2013 when it launched in China this mobile payment function was an incredible feature and hence helped WeChat become even more popular and as more people China started predominantly using smartphones eventually WeChat surpassed QQ even though they were both started as chat Services run

by 10 cents WeChat was definitely better for mobile and mobile was becoming much more widely used in China by 2015 we chat crossed half a Billion users of course whilst the app name hasn't changed chatting is now just a tiny fraction of what WeChat does which leads us to the most crucial feature of all for WeChat the feature that turned it into the Super RP it is today that dominates the lives of almost everyone in China in January 2017 we chat launched a feature called mini programs that allows users to access tens of thousands of

other apps within wechat's own app completely bypassing The need for an App Store so for example instead of you having to download a separate app for every single restaurant hotel or shop you go to they'd all just have a mini program within WeChat this not only allowed WeChat to connect itself to people's offline lives as well as online but it helps a me WeChat as the everything app even before this tensent had created so many of their own Services bundled into weats like payments games and dating but this mini Programs feature meant there was basically

no need to even have other apps on your phone because services from other businesses were now available via WeChat as well for example China's dominant ride sharing platform DD have their own mini program within WeChat so if you want a taxi you don't need a separate app or there's a mini program within WeChat for food delivery or tracking parcels and pretty much everything else you can think of so to Demonstrate this let's imagine for a moment you're a Chinese citizen and you're meeting a friend for dinner you call them through WeChat to confirm the plans

you book your taxi to the restaurant via WeChat in the taxi you play games and browse the news via WeChat send your friend your location via WeChat access the restaurant's mini program via WeChat which means you can view their menu via WeChat then take a photo of your food and post it on your Social feed which is on WeChat pay for your meal via WeChat then afterwards if you want to go and watch a movie guess what you book your tickets through WeChat essentially imagine your life without a smartphone at all and in China that's

what life would be like without WeChat okay I think I've said the word reach out too many times but anyway as a result of this mini programs feature tensent has essentially become the GateKeeper to the market for other Businesses since people don't really need to use the app store when WeChat has everything inside of it so companies almost have to partner with 10 cents in order for their services to be used but this means 10 cent can effectively tax all of companies by taking a percentage of the revenue generated through their mini programs WeChat is

linked to other companies so you go through WeChat to another app or website and then you buy through there but you pay with your wead Now what's interesting is that an allinone everything at like this has been suggested outside of China as well in fact even quite recently Elon Musk talked about x a super app similar to WeChat if you're in China it's basically you kind of live on WeChat it does everything and we don't have anything like that um outside of china such a such an app um would be really uh useful but it

was quickly shut down we have enough concerns about big Tech and Social media without one single company controlling everything but now you can see why tenant has become a money machine because unlike many of the big Tech Giants in the west such as Facebook and Google 10cent doesn't need to rely so heavily on Advertising Revenue in fact some 10cent staff joke about how Facebook's business model is very primitive there's a quote from a 10-cent employee saying when you have a billion users the last thing you should be Thinking about is how do I sell them

a ton of ads what you should be thinking of instead is how to ensure you keep these users happy so you don't drive them away because you're annoying the hell out of them and that's what's notable about we chats it has kept a pretty clean interface and doesn't spam users with ads it doesn't need to they make so much money through microtransaction since they're involved in so many aspects of people's lives When you have over a billion people using your app for so many different parts of their life every single day those small fees on

every transaction add up in a massive way how would you describe it to you how important is it half on my life basically everybody there uses it at least everybody I know that is aged 70 or younger in China uses WeChat basically the app can help you with all aspects of Life literally in China however given that WeChat Dominates people's lives in China you may wonder why it's not so popular outside of China whil we don't have confirmation of exactly how many people use it outside of China estimat suggest possibly up to around 100 million

which is decent but it's a tiny fraction compared to the well over 1 billion people inside of China who use weat and most of the people who use WeChat outside of China are Chinese expats living abroad or people needing to Connect with others who are in China so if weat is so useful in China why didn't the rest of the world adopt it why doesn't 10 cent expand more in other countries well this is where things get dark the simple answer is that the same reason 10 cense apps are so big in China is precisely

the reason they're not so big anywhere else it's time to look at 10 cense complicated relationship with the Chinese [Music] Government before we get into 10 cents current Rel relationship with the CCP it's important to understand how things all began in 1979 the then leader of China designated an area called shenzen as the first test zone of his new economic plans this would be the first part of China where capitalist business models were allowed and this began China's rapid Ascent to becoming a global superpower nowadays shenzen has been dubbed the Silicon Valley of China As

it's home to many of China's Tech Giants including tenzen but the Chinese government's plan was essentially to give some Chinese companies a huge amount of Freedom as long as they were benefiting the country overall so when companies like tenens Cent and Alibaba capitalized on the internet and built massive user bases China was happy to allow them to build such dominant companies by any means necessary without any real regulation as long as they were Benefiting China and the CCP overall they felt it elevated the image of China and Chinese entrepreneurship by having these hugely successful companies

it also meant that rather than foreign companies succeeding in China like the big American Tech Giants instead local Chinese companies would dominate as the government made it mandatory for foreign companies to partner with a local Chinese company and finally the CCP knew that if some Chinese companies became Huge Empires then they could invest in lots of other companies both in China and abroad thus by proxy allowing China to have a lot of influence on the world and control the narrative they want so basically for the Chinese government tensent was an appealing Prospect having access to

so much data was great for government surveillance and censorship and understanding the psyche of its citizens Physicians who were on the front lines who were warning about the Pandemic even before it had a name uh had their Communications uh censor WeChat routinely blocks accounts for discussing issues like the pandemic or human rights abuses in shinjang they went to my father and threatened him wow and said that if your daughter doesn't stop talking about human rights we are going to persecute your family like in the culture Revolution after their accounts are blocked users say that the

police come in to question Them for the problem is the app is so crucial for existence in China that users cannot even give it up so China was mostly happy to not interfere and let 10cent continue to grow its dominance even if it sometimes used anti-competitive tactics of course the CCP were wary of how much power this gave 10 cents which is why their relationship is not as straightforward as you might think they knew it was important to make sure 10 Cents was very closely aligned with the CCP and give them reminders that if 10

cents stopped being useful to the Chinese government tensent power could just as easily be taken away but anyway let's talk about what this partnership actually means kense stance is that in order to comply with China's legal and regulatory requirements it can process and handle private information without requiring user consent in certain situations those situations being if the Chinese government wants us to the CCP reportedly have a direct line to the desks of 10-cent product managers and are able to order deletions whenever they want or monitor specific accounts and specific phrases in both public and private

posts one particularly intimidating policy change in 2017 was that group admins on wi chats were made personally liable for whatever was said on group chats they run many simply deleted their groups as a result tend Also feeds data to China's social credit scoring system which can affect what citizens can do all that information they have like payment history real-time location who you're associated with can allow the government to create an incredibly detailed picture of who you are what you buy and how you behave thus allowing the government to give you a score of how trustworthy

you are as a citizen they're constantly monitored by facial recognition cameras that are able To instantly put a face to a name now the Chinese are also ranked it's aggregating data gathered by Banks private companies and the state to rate if someone's a good or bad citizen good score brings benefits but people with low scores lose rights the cinema names and shames people considered untrustworthy Plastering their details even their addresses across big screens among them is this journalist Leu who he got a little too close to uncovering Corruption among high-profile party members he was blacklisted

he only realized when he tried to buy a train ticket and was told he was banned from traveling but as 10cent grew larger it's seems the CCP became more demanding tensent has to employ hundreds possibly thousands of their own sensors whose job it is to block anti-government posts tensent then began deleting lots more posts and suspending accounts that stepped out a line there are multiple Examples of creators such as blogger Laura Leanne who had hundreds of thousands of fans reading her work but after making one comment the CCP didn't like her account was deleted without

warning and her income gone and thus whil Chinese citizens clearly enjoy the convenience of WeChat which admittedly is such a useful app in the back of people's minds they're aware that their every move and comment is documented something which the CCP openly remind People of whatever tensent can see the Chinese government can see and so it's kind of crazy that over a billion people have opted to sacrifice all aspects of their privacy and free speech for convenience there's apparently a joke in China that if you order too much food via WeChat you might get the

police tracking you thinking you're harboring fugitives now to be fair here I really do not believe 10 cent set out to create a government government surveillance Tool this wasn't some evil plan tensent was started by some entrepreneurs wanting to build a business like anyone else but they managed to create something so popular that the only way the CCP would allow it was if they had some control too so tenent didn't really have any choice but to fall in line Pony is a pragmatic businessman and knows he has to keep the government on side hence when

a reporter asked him about censorship at a Tech conference Pony Seemed to side with the government by saying lots of people think that they can speak out and that they can be irresponsible I think that's wrong now to be fair we have no idea how Pony really feels but he knows what would happen if he spoke out against the CCP in any way and the reality is that China's laws require all companies to hand over data if requested in fact it reported that many companies in China have a special office at their Headquarters called the

Internet Security Police room where Chinese public security forces can intervene in company operations or track certain users which brings us back to the question why isn't WeChat as popular outside of China it's not like tent didn't try at all they do have an English version of their app and even ran Big Marketing campaigns like this advert with Messi to try and promote weat to the World WeChat the new way to connect download it now for free free voice and text messages we love we share WeChat however one of the most fundamental reasons for its limited

International appeal is clearly because of this surveillance and censorship research from citizen lab found that the Chinese government does monitor and censor confidential information sent via tentant apps even from users outside of China for example I saw a story where One person in a private group chat had sent some news about Pro democracy protests in Hong Kong and was confused when nobody else in the group responded she only later found out nobody else could even see her messages as her private messages had been censored without her knowing it any taboo issues like mentions of tianan

square or Tibet are censored on 10cent apps regardless of if you're in China or not so basically just because you were using a 10cent app outside of China doesn't mean that 10cent wouldn't still have to supply any of your data to the CCP if they requested it remember T didn't have to stay on China's good side and thus many people understandably have some fear about one company especially a company with ti to the CCP having all of their info on every aspect of their life thus while surveillance and censorship is what allowed tensent to become

dominant in China as it meant the CCP Let them grow so big outside of China that has scared users off but it's not the only reason WeChat isn't as popular outside of China the second reason is that every country has different requirements WeChat works so well because it's perfectly tailored to China but for the app to be so effective elsewhere every country would need their own WeChat version with Services specifically suited to their country thirdly since China is such a massive Market it made more sense for tensent to go deep into that market where they

already had lots of momentum rather than diverting resources to start from scratch in other countries after all China has a population of over 1.4 billion people more than four times the entire population of the US but the one downside of doubling down on China was that 10cent didn't get the first mover advantage in other countries so if WeChat did want to try and become more Popular in the US for example it would somehow have to compete against so many different established companies who've already managed to get their apps ingrained in people's lives but the final

reason WeChat didn't work so well abroad is simply that it's historically been the case that Chinese tech companies struggle outside of China just as American companies struggle inside China however of course there has been one very notable exception recently Tik Tok a Chinese app which truly has managed to go Global and this leads us to one of 10 Cent's Most Fascinating battles [Music] in China once your business reaches a certain size you normally have to sell to or partner with one of the big three by do Alibaba or 10 cents but Tik Tok and its

parent company bite dance were the one notable exception now if you've seen my video on the history of Tik Tok You'll know that the Western social media Giants like Facebook and Google completely dismissed the threat of Tik Tok until it was too late they let Tik Tok become one of their biggest advertisers thus letting them steal hundreds of millions of users from their platforms as Tik Tok ran endless ads on YouTube and Facebook only years later with the American Tech Giants realize short form content was here to stay and launch their own short video apps

to Compete but by that point Tik Tok had already become a massive hit through advertising on their platforms tensent on the other hand immediately realized Tik tok's threat and carried out their usual Playbook move move tensent assembled a large team to recreate a very similar app to Tik Tok within WeChat and then run massive promotions to advertise it tensent also banned Tik Tok from advertising on their platforms and straight up just started blocking Links or mentions of Tik Tok on its platforms like WeChat it's interesting because when Elon Musk briefly blocked external links to competitors

within Twitter everyone when this is dumb but in China that's just part of the game and an example of the anti-competitive tactics that have enabled China's biggest companies to build such huge businesses unfortunately for 10 though for once this tactic didn't work Tik tok's biggest strength was its machine Learning algorithm that very accurately showed users the content that would keep them on the platform longer and thus once people were hooked on Tik tok's algorithm that already knew their preferences and was perfectly tailored to them there was little incentive to switch to 10- cents copycat version

and start over with an algorithm that didn't yet know their preferences so well so Tik tok's first mover Advantage always gave them the edge things actually got Heated between 10 cents founder pony m and bite dances founder jangi Ming because Jiang posted a screenshot of Tik Tok being the number one most downloaded app in the world and underneath criticized tensent for making an almost clone version of Tik Tok and for Banning Tik Tok within WeChat pony felt this public criticism was unfair given this was a common practice in China and he bluntly responded your words

can be regarded as slander the heated public Spat captivated China as both CEOs were normally so mild-mannered and reserved but it was clear no love was lost in this bitter rivalry however seeing Tik Tok succeed globally on such a huge scale something which 10 cents on apps like Gchat have never managed to do was definitely tough for Pony to take but wait hold on a second remember back at the beginning of this video I said tensent had a lot of influence all over the world well if their two most popular Products cuu and WeChat aren't

that popular with people outside of China why is 10cent considered such a dominant global company with influence all over the world to answer that it's time for us to look at tent's genius bigger picture strategy for world domination [Music] Pony once called a meeting of tensent top managers and highest ranking employees to plot out tensent strategy the meeting has since been dabbed the Conference of the Gods since it was essentially A Meeting of Minds that would plot out tenson plans for Domination and the decisions made in that meeting were have serious ramifications for not just

China but the rest of the world the main purpose of the meeting had been to establish what 10- cents core competitive advantages were and how those could be exploited the answer was fairly simple 10cent advantages were that they have huge Amounts of traffic and money far more than any competition and thus the plan became step one attract other businesses to launch their own mini programs via WeChat so they could leverage some of wechat's traffic step two tensent would then invest money into the businesses that were doing the best since tensent had all the data of

which many programs people were using how often and how much money they were spending step three after investing in certain businesses Tensen could then artificially give more traffic to the companies that invest in thus making them even more money which they can also reinvest in even more companies in other words 10cent can Sher pick the best mini programs invest in them boost their popularity and practically guarantee their investment as a big success no other company in the world has quite the same level of data on user Behavior to see what's popular and then the ability

to significantly Increase their value further by promoting them with M we chats if also creates synergies between tens Cent's Investments for example tensent has a significant stake in DD which is China's equivalent of uber and through WeChat tensent can promote DD more thus giving it an unfair advantage and increase the value of its investment but not just that because DD uses WeChat pay tensent also takes transaction fees on every payment it did the same thing after Investing in the Chinese e-commerce company JD once tensen owned part of the business they massively increased JD's visibility within

their apps to drive more sales of course all of this was insanely lucrative for 10 cent but then came the next part of the plan using some of the money it generates from its cash cows in China to invest in companies abroad thus letting 10 cent diversify away from China this is particularly important for 10 cens Because if their entire Empire is only based in China they are totally at the mercy of the Chinese government so tensent has acquired or invested in many hundreds of companies outside of China in all different Industries thus building a

huge International portfolio for example tensent became one of the largest shareholders of Tesla tenson also bought parts of Reddit and Discord this did prompt some backlash and concerns as some argue that if tens Cent Has access to a company's data so does the CCP and that through 10cent they can subtly influence decisions in these International companies and thus ultimately influence Western culture since the Chinese government can use the apps for surveillance in China that same could be done to users in the US it sounds extreme but it's not unrealistic just look at the NBA example

from earlier where the coach backtracked on his comments and apologized after Threats from 10cent and China but to be fair here tensent do mostly seem to stay out of the way of the international companies they invest in and just take an equity percentage and then not get too involved or at least they haven't yet as a result of this hands-off approach though some accused tensent of basically abandoning Innovation and now just essentially becoming a gigantic investment fund funneling money from its apps in China into promising companies In other countries rather than creating much that's new

or original itself and they don't even really try and build their brand that much internationally at 10 on Twitter is actually suspended because someone had been holding the Twitter handle with a bio saying Daddy 10 cent come and buy my accounts basically they were expecting 10 cent to come and buy the at 10cent Twitter handle off them but 10 cent didn't bother building their brand Internationally isn't a big priority for them they're happy to just quietly invest abroad now one of their most lucrative Investments has been in gaming the gaming industry is estimated to have

generated $176 billion of Revenue in 20121 almost five times the box office of the movie industry and 10 cent are essentially the biggest players in the market now of course even from the relatively early days of tencent they'd been experimenting with games themselves Especially mobile games in fact their game honor of Kings is so popular in China that there's a black market where people pay for others to play the game for them to improve their ranking as just like everything else in China it's connected to we chair so some people pay better players to improve

their game stats as it's a bit of a social and status symbol however most of 10 Cent's original games were overly tailored to the Chinese market often featuring Chinese propaganda to appease the CCP and so it became clear to tensent that rather than trying to promote their own games abroad it made sense to find games with potential and just give them loads of money to help them grow quickly and take a percentage of their company as a result tenson is invested in studios that make some of the biggest Global titles such as League of Legends

fortnite World of Warcraft Clash of Clans player unknowns Battlegrounds and The mobile version of Call of Duty they also partnered with Roblox to bring their games to the Chinese market but two of 10 Cent's most important Investments were buying 100% of Riot games and 40% of of epic games one of the world's most valuable startups this not only gave them a stake in some of the most played games on the entire planet but also investment in Epic Games as unreal game engine which has been described as the world's most advanced Real-time 3D creation tool and

is used for all kinds of different projects whilst 10 cents investments in international game studios have been extremely lucrative it's also brought some unwanted attention to the company many fans noticed that after 10cent acquired some of these popular games there seem to be more upgrades and unlockable content within the game that required additional payments and some BL this on 10 cent Being Greedy as they Were clearly pushing for more microtransactions like is the norm in China another issue arose after acquiring Riot games as tensent wanted to turn their most popular title League of Legends into

a mobile game to make even more money from it but the game developers didn't want to do this that was never their vision of what the game should be and since it was their game they thought that was the end of the discussion but they later found out Tensent had gone behind their back and made a ripoff of their game which is where honor of kings came from one Riot games employee said we were stunned they were blatantly ripping off our intellectual property to add insult to injury tensan even used notable League Of Legend players

to promote their new game which caused many people to assume Riot games was actively involved with this new game even though they weren't to be fair to tenen they were right that A mobile version would be popular by the end of 2017 honor of Kings the League of Legends inspired game was the most popular mobile game in China it was also in 2017 that tenzen overtook Facebook to become the fifth largest public company in the world their Cash Cow apps in China were more dominant than ever and their internet International Investments were paying off massively

that's extending 10 cents influence all across the planet and it has to be said that Nowadays 10 cent are truly great at finding ways to monetize for example 10 cense video platform essentially their version of Netflix now inserts extra ads into movies and TV series that weren't there in the original such as adding extra Billboards and signs in the background tensent Cloud hosting business has also become very profitable just like Amazon web services that started off to host their own services but then began selling it as a service To others plus as if tent weren't

already dominant enough the outbreak of Co was actually great for 10- cents Revenue people were at home on their phones more than ever which meant using their services and playing their games more 10cent generated $86 billion in 2021 alone and 35 billion of net profit making them one of the most profitable companies and so you may think that would be the end of the story that 10 cent would be unstoppable many Shareholders clearly thought so as 10cent market cap was approaching 1 trillion us but in 2020 suddenly 10cent began to face a lot more scrutiny

quite suddenly Donald Trump began threatening to ban weats and other Chinese apps president Trump is making good on his threat to crack down on two popular chinese-owned social media apps he signed executive orders Banning Tik Tok and WeChat from operating in the US on the grounds that the Chinese Communist Party could use them to steal users private data censor anything critical of China and help spread this information of course there were definitely strong political motivations for this attack on Chinese apps and the subsequent executive order to ban them in the US but even now with

the Biden Administration there are continued investigations into these Chinese apps and whether they are a national security risk that should be banned and thus as One of China's biggest companies tensent was thrusted into the international Spotlight more than it would like it may have taken a while but it seemed people were finally realizing the influence that tensent and this China actually had luckily for tensent their strategy of taking minority stakes in international companies gave them a lot of protection for example even if the US did want to take action against 10 cents it's not like

they would ban credit or Discord Just because 10cent had invested a lot of money in them the only risk was governments Banning apps 10cent fully owned and created like WeChat but as we know most of their users are in China so Pony figured this negative media attention in the US wasn't going to cause too much damage to tense Empire overall as long as tensent was on good terms with the Chinese government things should work out he breathed the S relief realizing maybe things were going to be Okay after all but then quite suddenly Pony's worst

nightmare became a reality you see tenson has faced a lot of business battles we've seen them go to war against Chinese companies like Ki big American companies like Microsoft and even political battles like with the US government but there is one enemy pony m most certainly did not want one enemy that could genuinely destroy them the Chinese government hey guys before we get to the Next part of the story I just want to say that if you find these videos interesting please consider turning on notifications for magnates media I'm working on some even bigger projects

right now so if you want to make sure you see them when they're ready just hit the notification Bell now also I just want to say a massive thank you for watching this channel these videos do take a long while to make so honestly I really appreciate all your comments and Support So yeah thank you for everything and now let's get back to the story [Music] in 2018 rumors of a change in government policy began to spread and then one day Chinese Regulators suddenly stopped approving all new games from being released the CCP said It

felt kids were becoming addicted to video games and they were also growing concerned about how violent some games were one government publication described online Games as spiritual opium when the CCP announced a ban of kids under 18 playing games for more than 3 hours a week people under age 18 are now allowed just 3 hours of gaming a week 10- Cent stock price immediately started to fall later that year 10 cents profit fell for the first time in over a decade largely because it couldn't release or monetize new games due to this new government policy

to appease the Chinese government tenen had to make Big changes for example tenen introduced facial recognition in their games and began using police databases to verify the identities of its users and their ages that way it could ensure people weren't playing games and suitable for their age and also that they weren't spending too much time playing tenen also had to change the nature of some of its games to ensure they aligned with the ccp's values for example one of their most popular games pubg previously Involved a 100 people killing each other until one person is

left but tenton had to change it completely they rebranded it as game for peace and the story instead became about patriotic Warriors the violence was removed and blood was replaced with green liquid when someone gets shot instead of dying the character simply waves back and disappears The game was filled with banners of nationalist slogans and patriotic propaganda basically the game was Completely censored and as some users pointed out turned into a prover propaganda machine whilst most people didn't like it they had no choice Kent had realized that despite their huge power and wealth they were

still completely at the mercy of the Chinese government and then things got much [Music] worse in October 2020 Jack Mar's company the ant group a gigantic fintech company in China Was preparing for its IPO it Was all approved and ready to go and then jackar gave a big speech where he seemed to publicly speak out against the Chinese government more specifically he openly criticized China's traditional Finance industry and its Regulators shortly afterwards the an group IPO was abruptly cancelled supposedly by order of the Chinese president himself then Jack's other company Alibaba became the subject of

an antitrust investigation with allegations of using Anti-competitive monopolistic practices and then Jack Mah a guy who was always happy to take the Limelight and do speeches and interviews and high-profile events just suddenly disappeared all of his planned public appearances were cancelled and it seemed like he'd been exiled in fact some questioned if he was even still alive now it's worth pointing out tensen and Alibaba have been Rivals for years directly competing in so many different Industries in China as the country's two most dominant conglomerates so when Jack marah spoke out and faced immediate punishment Pony

Mar must have thought he'd won but little did he know Jack's actions would be the Domino that began t downfall as well it turns out the Chinese government was not just going after jackar and his companies but all of China's big Tech Giants in 2021 several other large Chinese tech companies including 10cent received huge Fines for essentially being monopolies the fines added up to billions of dollars the CCP had allowed big Tech almost free reign for years now it was raining those Tech Giants back in now to say that Jack's public criticism of the government

was the reason for what happened next is probably not true that incident was likely just the straw that broke the camels back in truth China for a while had been growing concerned about just how powerful some of these Companies were becoming China's leader often promotes the idea of common prosperity and that the tech sector had definitely created a large wealth Gap in the country trying to limit that inequality would definitely be popular with many Chinese citizens the Chinese government also expressed National Security concerns of their own given all the data these companies like tensent have

because sure China likes having that data for themselves but letting any Single Corporation dominate too much could be be a risk for China so as well as the fines and some Executives being forced to step down new regulations were introduced to limit the power of some of these tech companies of course the stock prices of Chinese businesses began to plummet its estimated $1.5 trillion of value was wiped off Chinese Tech company's valuations due to the Crackdown 10cent in particular has lost over $500 billion off its market cap More than half its value since the Crackdown

began and to be honest many were surprised 10cent were even dragged into this because unlike Jack Mah who publicly spoke out tensent were known for being extremely Cooperative with regulators and the government they were always compliant with policies and never publicly critical of the CCP and yet 10cent was definitely targeted as well as facing anti-monopoly investigations and big fines their new games sto being Approved and New Deals they wanted to make were blocked and part of the reason may have been that the CCP didn't think tensent was actually doing enough to help the state you

see China had got into a difficult position as a result of Skyhigh rent costs its controversial zero covid policy and many extended lockdowns many citizens were unhappy and soon huge protests and riots broke out and it's clear some of this would have been organized and word spread through Tensent apps like WeChat because although tensent do employ a lot of sensors to try and monitor things controlling the discourse of over a billion people isn't always easy there are ways around it like in China some people simply hold up a blank piece of paper as a protest

symbol since that way it's hard for tensent software to detect any wrongdoing in other words tensent was inadvertently giving a voice to people to speak out through its apps and So perhaps the government began to see 10- cents dominance as less of a good thing but the other reason for all of this is not so specifically about 10 cents and more just that the CCP perhaps felt big Tech in general had grown too powerful and the government needed even more control and to remind everyone who's really in charge so basically it seems China had achieved

what they wanted to by not having much regulation for years they'd allowed Chinese Businesses to thrive they' got their surveillance tools like WeChat and enable Chinese companies to invest internationally to give China some influence abroad but now that they'd achieved what they set out to it seems the CCP wanted to send a message that even the wealthiest and most influential Chinese entrepreneurs and companies are not above the party or the law 10cent perhaps grew too large for the Chinese government and needed to be tamed and of Course it should be pointed out that many of

the new regulations and laws to prevent monopolies made sense it only seemed extremely aggressive because for so long there had been almost no regulation and within a couple of years a lot had changed but in the midst of all of this Pony began showing up for less and less public events even missing his company's own annual party and as 10 cents valuation continued to fall some began to question what was going to Happen to pimar and his business [Music] Empire before we get to the next chapter did you know that when shopping online shipping costs

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for 10cent Let's just quickly summarize where we're up to as we've covered a lot here and I think we could all use a very quick recap so tensent started out by copying a chat software and by tailoring it to the Chinese market they then turned it into more of a social media platform just as the era of desktop Computing was exploding tensent then used their resources to jump on the wave of mobile internet growth and became an essential part of Chinese people's lives by Creating WeChat for mobile they then utilized the insane traffic they were

getting from QQ and WeChat to diversify into other more lucrative opportunities like gaming and video tent's approach to Rivals was to clone their product or service and then drive vast amounts of traffic to it thanks to QQ and WeChat if that didn't work they'd buy out the company instead or buy a large stake in it and tensent continually kept reinvesting profits to either clone or Buy other services and often swallow them into WeChat eventually tensent had a whole ecosystem of influential companies but the reason they were able to often use anti-competitive tactics and expans so

rapidly was because of ties to the Chinese government who use their apps for surveillance and censorship this limited the appeal of 10 cents apps outside of China and so they began investing in international companies instead including many of the Biggest game developers and companies such as Reddit and Discord 10cent became one of the largest companies on the planet but once China began its Crackdown on big tech companies in order to reain them in after they'd become so powerful 10 cents valuation began to fall pH okay so that's where we're at but what next well the

cracks have definitely been showing for 10 cents there have already been layoffs over the last few years and pony recently blasted Employees for being lazy saying you're chilling on the weekends playing ball and began demanding a lot more from his team in an uncharacteristically aggressive speech but to be honest tent should be fine they are still an absolutely massive company worth hundreds of billions of dollars with huge influence still the crackdowns may have stunted their plans a little but tent is still a very powerful company WeChat still dominates the lives of People in China and

tensent will continue investing in companies abroad tensent even had some good news within China in September 2022 when for the first time in over 15 months it got its first new game license approved d a new mobile game called Health defense the game was about public health and had very clearly been produced to please the Chinese government and that is perhaps the one thing that will change tensent will have to be even more closely Aligned with the CCP to ensure there's no further issues for example tenent was actually one of the major investors in the

movie Top Gun Maverick but they decided to pull out of the project over concerns that the film's themes could anger the Chinese government 10 centers also partnered with the ccp's propaganda Department to help promote their worldview and socialist values like they released the game clap for xiin Ping a game where you literally just clap for The president to show your appreciation so basically it seems clear that tensent is trying harder than ever to stay in the Chinese government's good books and I mean they don't really have a choice as for what's next for 10 cent

though that's a question Pony is almost certainly thinking about often he was early to catch the rise of desktop Computing and then early to Double Down On The Rise of mobile internet as well so centent catch the next wave whatever That may be for example some believe the metaverse could be a big part of our future and tensent are arguably even better position than meta for building the metaverse given their dominance in gaming and Virtual Worlds already but then again the CCP probably wouldn't want a metaverse that they couldn't have a lot of oversight in

so that probably limits 10 cent chances of building a Global metaverse and thus the eternal struggle for tensent to keep China and The rest of the world Happy will continue but what can't be denied is that tenens Cent is ultimately an incredible business success story whilst this video has of course looked at some of the controversy surrounding 10cent they've also done a lot of good too and made some incredibly useful apps so there is definitely plenty of lessons to learn here there's a quote I like a lot that you have to learn the rules of

the game and then you have to play better Than anyone else and I think 10cent is a great example of that they literally went from being a tiny company on the edge of bankruptcy to one of the world's most valuable companies and so I hope you've enjoyed this journey through 10 cents history but now since we've just looked at one of China's most influential companies I think it's only fair we do the same with one of America's most influential companies which you can do right now by clicking The thumbnail on screen this is one of

my favorites and I think you'll like it too anyway all that's left for me to say now is thank you for watching this video to the end you are a legend and I'll see you in the next video right here cheers [Music] [Applause]