Maverick China Research

MAVERICK CHINA RESEARCH is pleased to announce the publication of a new market report: "Tenpay - Riding The QQ Freight Train". Tenpay is the exclusive online payments provider of Tencent, one of the largest and most powerful internet companies in China today. Tencent's service reach includes instant messaging, gaming, blogs, and various wireless value-added services branded under the "QQ" name; also included in the Group’s umbrella of companies is an eBay-like online marketplace called Paipai. Tenpay provides the online payment platform for all of these services. With over over 26 million users, Tenpay easily ranks them among the leading third-party payment companies in China.

In this report, Maverick China Research dissects Tenpay's business model, the role of Tenpay within the Tencent Group, and Tenpay’s opportunities with merchant partners outside the Tencent family. "Tenpay – Riding the QQ Freight Train" is the ninth installment in Maverick China's Third-Party Payment Profiles.

KEY FINDINGS:

- Tenpay is an integral part of Tencent and its main purpose is to facilitate online payments for the Tencent Group.

- As a stand-alone company, Tenpay has yet to prove it has a viable business model, as revenues and profitability are being sacrificed for the success of Tencent and its subsidiaries.

- Tenpay has a fast-growing registered user base currently standing at 26 million, and has direct and exclusive access to serve the payment needs of Tencent’s 300 million active users.

FIGURES:

Figure 1: Credit Cards Issued in China and in the US (M)
Figure 2: Internet Users in China, 2001-2006 (M)
Figure 3: Mobile Subscribers in China, 2002-2010F (M)
Figure 4: China Government Groups Involved in Third-Party Payment Regulation
Figure 5: The Evolution of Tencent's Services
Figure 6: Tencent Organizational Structure
Figure 7: Tenpay’s Operation Model
Figure 8: Tenpay Transaction Volume Breakdown (%)
Figure 9: QQ Registered Users, 2006- 3Q 2007, (M)
Figure 10: Tenpay Registered Users, 2006- 3Q 2007, (M)
Figure 11: Tenpay Users as a Percentage of QQ Active Users, 2006-2007 (%)
Figure 12: Q Coin Purchase Breakdown (%)
Figure 13: QQ Games and Services Paid for by Q Coins
Figure 14: Tenpay's Co-branded Services
Figure 15: Tenpay Logo
Figure 16: Tenpay Bank Partners
Figure 17: Tenpay Merchant Partners