Tencent is challenging Amazon and Microsoft's cloud dominance by leveraging its WeChat user base.

• Tencent Cloud CEO Dowson Tong stated that Tencent is differentiating itself from other cloud service competitors by utilizing its WeChat ecosystem.
• Tencent's clients expressed interest in developing mini programs on WeChat's platform to attract users to their services.
• Tong stated that what sets them apart from numerous other online platforms is that aspect.
• The three largest cloud service providers, namely Microsoft Azure, Amazon Web Services, and Google Cloud Platform, collectively account for 68% of the market share.

Tencent Cloud CEO Dowson Tong stated that Tencent is increasingly using its WeChat super-app ecosystem to differentiate itself from leading global cloud service providers.

Tencent Cloud is gaining more clients interested in creating their own super apps, as it offers technology and experience from establishing the WeChat ecosystem, according to Tong, who spoke to CNBC at the recent Singapore Fintech Festival.

Microsoft Azure, Amazon Web Services, and Google Cloud Platform are the three largest cloud service providers, accounting for 68% of the market share as of the second quarter of this year, according to Synergy Research Group.

Cloud infrastructure is commonly used to develop super app platforms for scalability, reliability, and efficient resource management.

Many of Tencent's cloud services clients expressed interest in creating mini programs on WeChat's network to attract existing users to their services.

Tong stated that many of our enterprise customers desire to utilize the technologies that contribute to the success of our consumer services, as well as take advantage of our ability to connect with users.

The majority of the interest pool is made up by the financial and government sectors, the company stated. For instance, Canadia Bank in Cambodia collaborated with Tencent Cloud to launch a new mobile banking app in 2023.

An all-in-one app that offers a range of services, including messaging, payment transactions, and food ordering, is known as a super app. WeChat, with approximately 1.3 billion active monthly users or 90% of China's total population, is the world's largest super app.

WeChat offers an all-encompassing platform for clients, while global competitors Amazon, Google, and Microsoft typically provide their services across multiple platforms and applications.

While Amazon, Microsoft, and Google each specialize in different areas, they do not have a single app that integrates all their services.

Microsoft reportedly contemplated developing a super app in 2022, which would include messaging, web search, news, and shopping features. However, there have been no official statements or updates from the company regarding this report.

While Tencent's super app ecosystem is unique, it may not be the ultimate solution in the cloud space, according to Wei Sun, principal analyst, artificial intelligence team, at Counterpoint Research.

Sun stated that in the cloud industry, super apps are not a key component of service offerings. Instead, cloud clients prioritize infrastructure reliability, scalability, security, and compliance over integrated consumer-facing applications.

Although super apps can increase user engagement and gather data, they do not directly affect the primary services that cloud clients seek.

Sun acknowledged that a super app that collects integrated user data can provide "definitely massive added-value" to clients by enhancing their data flywheel, where the more data the system collects, the more value can be extracted.

The lack of a super app among the three cloud giants could be due to various regulatory issues and market trends in the West, where specialized apps are preferred over all-encompassing solutions, she stated.

In Asia, super apps have gained significant popularity, as evidenced by the success of Gojek, Grab, and WeChat.

The global market for super apps is projected to grow at a compound annual growth rate of almost 30% between 2023 and 2030, reaching a value of $61.30 billion in 2022, according to a research report. This growth is likely to increase the appeal among super app builders for cloud services offered by Tencent.

Tencent Cloud's ability to integrate clients' public and private cloud resources is a key factor in its competitiveness against international cloud providers, who primarily focus on public cloud, according to Tong.

In a private cloud, companies can store their own data centers within their own facilities and manage them independently without having to share with other clients.

Tencent's uniqueness lies in its ability to offer tailored on-premise solutions specific to client needs in the Chinese market, especially customizing it for social media, entertainment, video, and gaming optimizations.

She added that the edge given to WeChat by its super app status further forms an upward spiral.