Tencent invests US$50 million to Kik messenger, the Canadian instant messaging application for mobile devices that is available on iOS, Android, and Windows phone operating systems. Kik has earned the company one billion dollar valuation since the investment in August.
Kik targets young people as major customer group. At present there are 240 million registered users, of which 42% are aged between 16-24 years old. Kik is expected to learn good experience of attracting the young generation from Tencent, and developing its mobile business as WeChat does. One of the outstanding advantages of Kik messenger that may help its mobile business is that Kik mobile shopping users almost has the similar ratio with WeChat. However, the biggest challenge for Kik is to allow users to believe that purchasing goods on messenger application is safe, convenient, and cheap.
Among the US instant messaging users from 16 to 24 years old, Kik consists of 10% while Tencent almost has no market share. This is a very important opportunity and timing for Tencent. Besides Kik, Tencent also invested in Snapchat, whose daily active users totaled 1 billion according to its CEO. However, Snapchat and Facebook can’t serve a large number of users in China. Kik is the only and best choice for Tencent to improve its overseas brand. The “purely financial” investment is expected to create a win-win future.
Also read: China Top 100 Mobile Apps in July 2015