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Tencent becomes latest Chinese firm to invest in Singapore with new Southeast Asia hub

09/15/2020 | 04:35am EDT
FILE PHOTO: People walk past a Tencent sign at the company headquarters in Shenzhen

Gaming giant Tencent Holdings Ltd said on Tuesday it would develop a regional hub for Southeast Asia in Singapore, opening a new office and becoming the latest Chinese tech firm to invest in the city-state.

The new hub comes on the heels of a planned expansion by TikTok owner ByteDance and investment by Alibaba Group Holding Ltd as firms look to deepen their exposure to fast-growing Southeast Asia - home to about 650 million people.

Singapore has also gained fresh appeal as a base for Chinese corporate operations, benefiting from the political tensions that have rocked rival hub Hong Kong and growing distrust of China in the United States and other parts of the world.

Tencent will develop a full-scale comprehensive hub in Singapore that will house its international game publishing business, said a source with knowledge of the matter, who was not authorised to speak to media and declined to be identified.

Tencent did not disclose further details of the office.

The plans highlight Tencent's international ambitions despite setbacks in India where some of its apps have been banned and in the United States which has flagged an imminent ban on U.S. transactions relating to its WeChat messaging app.

"We view Tencent's decision as a necessary step to extend its enterprise service offering (Tencent's cloud computing business) to this new market," said Alex Liu, an analyst with China Renaissance.

He also noted Tencent had several minority investments in Southeast Asia such as its stake in Singapore online gaming and e-commerce firm Sea Ltd, and has been making deeper forays into the region's gaming market.

Offering lucrative grants and incentives, Singapore has been ramping up its efforts to lure tech firms and investors in recent years. Ethnic Chinese also make up a majority of Singapore's population and Mandarin is widely spoken, making it one of the most popular locations for Chinese firms looking to expand overseas.

ByteDance, whose short-form video app TikTok has also been deemed a national security risk by the Trump administration, plans to invest billions of dollars and recruit hundreds of employees in Singapore after opting to base its Southeast Asia regional headquarters there, according to a source.

Alibaba, which owns Singapore-based e-commerce firm Lazada, this year bought a 50% stake in a Singapore office tower. It is in talks to invest $3 billion in Grab Holdings Inc, Southeast Asia's biggest ride-hailing firm and Singapore's most-prized tech firm, Bloomberg news agency has reported.

In addition to the Chinese investments, America's Zoom Video Communications has recently opened a new data centre in Singapore.

By Pei Li and Aradhana Aravindan

© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
ALIBABA GROUP HOLDING LIMITED 1.64% 218.38 Delayed Quote.-7.68%
CHINA RENAISSANCE HOLDINGS LIMITED -6.21% 23.4 End-of-day quote.47.54%
GOLDEN EAGLE RETAIL GROUP LIMITED 0.15% 6.87 End-of-day quote.-2.41%
SEA LIMITED 3.04% 289.42 Delayed Quote.41.11%
TENCENT HOLDINGS LIMITED 0.09% 583 End-of-day quote.3.37%
ZOOM VIDEO COMMUNICATIONS, INC. -0.93% 373.4 Delayed Quote.11.74%
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