Follow-up on the internet industry in Q3

Tencent

The Q3 report looks decent from a financial data perspective. Tencent highlights different strengths each quarter—previously focusing on Mini Program monetization and Video Accounts, but shifting to game monetization in recent quarters. Tencent's overall operational capability remains strong, but two points need attention: First, whether game growth can sustain. Second, the resurgence of e-commerce logic in monetization strategies. It seems whenever revenue growth lacks new drivers, e-commerce naturally becomes the fallback.

ByteDance and Bilibili have also experimented with game monetization. Tencent once tried Yixun years ago before swapping to JD.com stock. NetEase similarly dabbled with Kaola before selling it to Alibaba. The lesson? Traffic doesn’t guarantee e-commerce success, but traffic-rich platforms always believe they can, fueling fierce competition—ultimately expanding the internet commerce pie.

Watch WeChat’s e-commerce moves closely. Also monitor whether game growth can maintain momentum.

Meituan

Meituan’s food delivery and in-store services are now relatively stable, with self-sustaining cash flow.

Three focal points for Meituan: First, profitability of new ventures—will unprofitable ones be scaled back? Second, potential resistance to food delivery price hikes. Third, whether consumer reliance on delivery is declining. The link between price increases and dependency needs ongoing scrutiny.

Alibaba

Alibaba’s core remains Taobao (or "Taotian Group" as some call it). While Taobao dominates certain categories, it competes in a shared pool with JD.com, Pinduoduo, and livestream commerce across WeChat, Kuaishou, and Douyin. Each platform has unique audiences, traffic, and product strengths—but none are immutable.

E-commerce shifts often happen quietly. JD.com disrupted quality norms; Taobao evolved into Tmall as Pinduoduo rose; Taobao’s livestreaming stars like Dong Yuhui and Xinba inspired rivals. Wherever there’s traffic and fandom, monetization follows.

Remember: E-commerce growth steals from traditional markets. JD.com’s rise, for instance, indirectly challenged Suning and Gome.

Tencent Music, Bilibili, Kuaishou, Yuewen

Bilibili leans toward depth, heavily investing in content and value-added services.

Tencent cited music as a driver for service growth this quarter. Comparatively, Tencent Music dwarfs Yuewen Group in revenue—proof that music IP monetization (e.g., licensing classics like Jay Chou’s catalog) outperforms novels-turned-IPs. Even fans of NetEase Cloud Music might switch to Tencent for premium content.

Bilibili mirrors Tencent Music’s content-first approach, while Kuaishou prioritizes viral traffic. Short-term, Kuaishou’s ad and e-commerce monetization is more direct; long-term, Bilibili bets on content compounding. Yet Tencent Music’s copyright rigidity—demanding top-tier content and capital—offers the clearest value.

That’s all for today—covering social, content, gaming, e-commerce, and ads. For those short on time, consider these index funds:

HK Internet ETF

China Internet ETF

Though Xiaomi wasn’t discussed, here’s CEO Lei Jun’s photo—a reminder to stay calm in investing and sleep soundly.

Covered Stocks & ETFs (themes for frequent mentions):

A-Shares:

Angel Yeast | Daqin Railway

ETFs:

CSI A500 ETF | CSI A500 | China A50 ETF

CSI Consumer 50 ETF | 5G ETF

Brokerage ETF | HK Consumer 50 ETF | HK Internet ETF

China Internet ETF | US 50 ETF |

HK Stocks:

Horizon Robotics | Tongrentang | CSPC Pharma | Li Auto | Nio

US Stocks:

Source: Bosi