Image from @baloocartoons.com
Tencent Holdings is one of the largest and most influential internet companies in China. According to the PitchBook website, this year alone the company has generated more than $80 billion in revenue, providing services that range from social networks, music, e-commerce, online games, payments systems, broadcasting and search engines. Tencent Holdings also operates one of the largest social media apps in China known as WeChat. Since its launched, WeChat has been a huge success in China reaching more than 100 million users in its first 433 days. Alongside, it original purpose, the app developed different features like The Digital Hongbao. Traditionally, Chinese people give money in red envelopes (Hongbao) on special occasions like birthdays or New Year. When this feature was first launched, Chinese people sent more than 200 millions dollars through Digital Hongbaos. ‘WeChat developers thought of a simple, yet effective way to rethink one of the oldest Chinese traditions‘ (Eggsist). This is one of many examples where Tencent has used its innovative ideas to grow. In 2018, the company wanted to expand its investments beyond China, so it invested in the Indian online education provider BYJU’s, alongside with investors such as Mark and Pricilla Zuckerberg. At one point BYJU’s was valued at $16.5 billions and it reported having more than 13.5 millions of students during the first two months of the lockdown.
In May 2019, Tencent underwent significant changes and established a dedicated branch for education, formerly known as Tencent Education, as reported by Siyi Zhan in his article Tencent Education’s Latest Moves to Connect the Whole Education Industry. By 2020, Tencent Cloud Education was among the top 5 investors in edtech in China, spending more than $1.43 billion in educational platforms and apps. These funds were invested in 56 educational companies, 49 of which were Chinese digital tutoring platforms – it also invested in 9 companies that were at one point Unicorns. The biggest investments in the educational sector were in the second half of 2019 and the first half of 2021 (Pandaily, 2022). In the article written by Zhan, it is posible to see the Tencent Education business plan:
Image from Zhan,2020
However the Tencent Education‘s expansion was limited due to radical political changes in China. In June 24th of 2021, Tencent and many other Chinese companies investing in after school tutoring were deeply affected when the government decided to stop any of these type of companies from making any profit, raising capital or going public. This new law, The Double Reduction Policy, sought to:
lighten] students’ homework load and saving parents money, the new guidelines require tutoring schools to stop teaching core curriculum subjects or spin off such activities into nonprofit units. Foreign ownership and public listings of such companies are banned. So is providing any classes at all on weekends and holidays—thereby slashing marketable hours by 80%. For-profit education companies will be limited to extracurriculars like art and sports (Chen, 2022).
One of the main official reasons to establish this law was to reduce the financial burden on parents and alleviate exam-driven pressure on children. However, it has been argued that the Chinese government aimed to regain control of the educational system by curtailing private investments in the sector. The policy was established:
As billions of dollars were being invested into private tutoring firms. Before the release of the policy in the summer of 2021, the size of the after-school tutoring sector reached upwards of RMB100 billion (including RMB40 billion for online tutoring services). The belief was that the bulk of this money flowed into China from outside through different global investor pathways (Qian, Walker, and Chen, 2023).
Before the introduction of The Double Reduction Policy, Tencent invested in a number of Edtech platforms. Among them, there was Classroom Intellisense, an e-learning platform that offers various courses ranging from coding and exam preparation to hobbies. It has 33.83 million students subscribed to their courses, which can be either pre-recorded or live-streamed (Tracxn). Tlearning is a digital platform that uses artificial intelligence to help teachers and students of both primary and secondary schools meet the new curriculum standards in China. According to the Tencent website, the platform offers an ‘expert team supported by the Minister of Education but open to a creative community’ (Edtencent website). It is worth noting that when China allowed students to return to school after the pandemic, Tencent rolled out a tracking app called Fuxuema (school resumption code). According to an article written by Reuters in March 2020, the app was embedded in Tencent’s popular app WeChat, aiming to allow teachers and education officials to monitor the health status of students and their parents.(Reuters, 2020). One of the latest investments that Tencent made was $40 million in an online drawing education app called Meishubao. As reported by the newspaper Nikkei Asia, by the end of 2020, the investors of this app aimed to promote inclusive education, with a positive social impact in China (Wang, 2020).
After the introduction of The Double Reduction Policy in China and its success in India, Tencent started to invest in education startups overseas, targeting Africa and Europe. In Africa, Tencent invested in a Nigerian educational startup called uLesson. Similar to Bridge International Academies, uLesson aims to provide high-quality and affordable educational services to primary and secondary schools in Africa. In 2023, uLesson established some physical learning centers, but the initiative was short-lived and closed just a couple of months after opening. In 2022, the company also invested in Kukua, an African edutainment startup based on a superhero named Super Sema who fights a supervillain AI robot using STEM inventions (Innovation- Village.com, 2022). Kukua’s mission is to empower the new generations through entertainment.
One of Tencent’s investments in Europe and the first unicorn in the edtech sector on the continent was the Vienna-based online tutoring startup Gostudent. This online educational platform connects private tutors with students aged 6 to 19. The company sells monthly subscriptions to parents and takes a portion of the tutor’s earnings as a commission. Today, Gostudent operates in Europe, Latin America, and the USA.
Nowadays, Tencent has integrated all its products in one big cloud platform, creating its own digital ecosystem:
Image from https://www.beyondgta.com/post/what-is-tencent-cloud
Tencent Cloud also offers an Online education solutions, including: infrastructure, operation assistant, smart classroom and teaching tools.
Image from Tencent Cloud
After researching Tencent and looking at its bussiness plan, it is clear that the company has an investor’s vision for education: targeting parents, and offering an extensive range of products that work in collaboration with other products from the same company. These platforms provide modular learning and develop their own curriculum while implementing AI and software solutions. As Pfotenhauer et al. discussed in The Politics of Scaling: Perhaps most visible in the rise of platform technologies and surveillance capitalism, “vast scale” has become quasi-synonymous with the success of companies that did not exist two decades ago, but now easily reach hundreds of millions of users across the globe’. Tencent has embraced scaling up at a great speed, especially after The Double Reduction Policy in China. This company extended its operations across the globe. As Pfotenhauer et al. underlined in the same article, this company has frequently ‘scaled up and profited later’.
At the same time and due to the range of products that Tencent can offer to its subscribers, one could argue that Tencent is ‘based on a model of education that involves a person’s whole life course and that is increasingly integrated with private technology services as well as the entertainment industry. EdTech investors are therefore setting the digital scene for the future of education in schools and beyond’ (Davies et al.,2022). Tencent have created an huge ecosystem with small ecosystems of products that are interconnected, with every interaction making more money for the investors and collecting more data from its users. Tencent has created a web that reaches into all aspects of the society. Using social media, music, e-commerce, search engines, heath apps, games and education, the company is influencing people daily. The Kukua app is a clear example of edutainment, where Tencent blend education with games, or WeChat where social media is used as an educational tool as well as a social media app.
As argued by Davies et al.,2022, with the possible political power that edtech companies may be seeking, it’s interesting to see how the Chinese government is trying to control and influence tech companies by buying golden shares. These types of shares allow government officials to be directly involved in the company’s direction and the content they want to develop. In fact, the Chinese government just bought : ‘a “golden share” in a domestic subsidiary of Tencent Holdings …a company registration database showed, the latest sign of China stepping up its control over its tech sector’ (Ye, 2023). It has also been reported that after the attempted ban of WeChat in USA by former president Trump in 2020, Tencent spent more than 6 million dollars lobbying the federal government to stop this ban. In an article related to Tencent video games, the author states:
Concerns of weaponizing the narrative stories of video games into propaganda only scratch the surface of Tencent’s active campaign to conquer your home. In 2020, the online community highlighted the spyware-like anti-cheat software used in Valorant. The so-called anti-cheat software would launch upon starting your computer—regardless of whether the user opened the game or not—and would monitor all user activity, logging which programs were used. This software broke from the industry standard and was viewed as intrusion into the user’s privacy (Denton, 2022).
One could argue that if Tencent is capable of using video games to allegedly spy on its users, there is no reason to believe that the company couldn’t do the same with its educational platforms and software. Even in the absence of a political agenda, there exists a strong economic motivation. For instance, in 2019, Tencent developed a strategy that allowed parents to reward their children’s good grades with game time (Fingas, 2019). This serves as a notable example illustrating that Tencent’s potential to harness user data across various platforms underscores the notion that economic gain may take precedence.
If one analyses one of Tencent’s investments, uLesson, it is possible to see how Tencent is offering ‘benevolent capitalism that can save education and alleviate geographical, social, and economic inequalities through intelligent use of data and strategic investments’ (Davies et al.,2022). Equally, by offering online tutoring, after-school activity platforms, and recently, skills development with its investment in Udemy, Tencent is creating an ecosystem of products that provide not only school support but also lifelong learning. It is possible to argue that despite the control of the Chinese government, Tencent is still expanding its portfolio and influence inside and outside its original base. It is also possible to establish that the company has been able to de-institutionalise education while, at the same time, re-institutionalising it around its growing portfolio (Davies et al.,2022). Even though, the number of Tencent Holding users has been in decline, the company still amasses 571 millions of active users, having the scale needed to be a strong player in the edtech area. As established by David et al. BYJU’s, one of Tencent investments, is now worth US$22 billion.
It is impossible to know the scale and power that Tencent will have on education in the future, but the fact that the Chinese government has acquired a golden share demonstrates the economic, social, and political impact Tencent has had in that country. One could argue that due to the lack of strong regulation in new markets like Africa or even the UK, it is easy to see how much political influence this company could have and how it can reshape and dominate education in the rest of the world. It seems to me that education is just another commodity that Tencent trades for money, so I cannot see that improving the quality of education or promoting subjects that do not generate profit would be more important than scaling up to generate more money and power for this company.
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