TENCENT Holdings Ltd.’s ubiquitous WeChat service emerged after founder Ma Huateng encouraged employees to compete against each other to create a mobile messaging business. WeChat now has more than 805 million users, who turn to the service not just for texting but also for playing games, paying bills and buying money-market funds.

    That blockbuster helped propel Tencent’s growth into the biggest publicly traded company in China with a market value of HK$1.97 trillion (US$257 billion). Ma now wants to repeat that success as Tencent moves into live-streaming video, letting at least six divisions compete for eyeballs in a market expected to mushroom nine-fold in value to almost US$13 billion by decade’s end.

    “Tencent’s culture is like a shark womb,” said Andy Mok, managing director for recruiter Red Pagoda Resources in Beijing, referring to how some unborn sharks cannibalize siblings in the womb to ensure their own survival. “It’s not as deadly, but it makes every member adapt faster and be more competitive,” he said.

    The idea of competing with co-workers has been extolled by Goldman Sachs Group and General Electric. Ma, China’s third-richest person, said in December that internal competition is a necessary driver of innovation. Besides the live-streaming services, Shenzhen-based Tencent currently operates at least four music apps, has three businesses working on virtual-reality technology and owns two film units.

    “We have a startup mentality,” said Ross Liang, a general manager at Tencent’s Social Network Group. “At Tencent, there isn’t a real clear line about who can’t do what.”

    Tencent declined to make Ma available for an interview. Its shares have risen 36 percent this year in Hong Kong trading, compared with a 5.9 percent increase for the Hang Seng Index.

    Potentially the most lucrative of Tencent’s nascent efforts is in the live-streaming business. Those services let users broadcast themselves in real time while eating at a restaurant, test-driving a car or putting on makeup.

    A market valued at about 9 billion yuan (US$1.3 billion) last year is estimated to reach 85 billion yuan by 2020, according to an HSBC report in July. The number of active users during that same period is expected to more than triple to 491 million.

    Apps such as Twitter’s Periscope and Facebook are banned in China, creating fertile ground for domestic competitors. There currently are about 200 homegrown services, including those developed by Alibaba Group Holding and Baidu, according to researcher iiMedia. The biggest include Momo Inc., YY Inc.’s Me and Inke.

    Celebrities, both traditional and internet-created, can cash in by interacting with fans for virtual gifts such as flowers and toys, and by promoting their own products. Hosts typically keep 30 percent of the revenue from virtual gifts, with the rest going to the platform, according to a Credit Suisse report in July.

    “This is the virtual campfire,” said Nir Eyal, the San Francisco-based author of “Hooked: How to Build Habit-Forming Products.” “The faster someone can get a response, that’s going to make the technology more habit-forming, stickier and increase user engagement.”

    Startups in the sector have raised an estimated US$750 million in capital, according to researcher Zero2IPO.

    Tencent is developing its units — Qzone Live, Huayang, Now, eGame, Kg.qq.com and Live.qq.com — as the number of Chinese accessing the web via smartphones increases to about 656 million, according to the government.

    It’s also trying to keep up with the ongoing structural shift in China’s advertising market.

    (SD-Agencies)