Written by ︱Zeng Xianyong

Produced by ︱Yongli Business Review & Atong Observations

Recently, Tencent has made new moves in the automotive sector. Its subsidiary Ecar first announced its upgrade to 'Tencent-Ecar Technology', reshaping its ecosystem. In the future, the company will focus on the Tencent-Ecar ecosystem, continuing to integrate innovation, with its business evolving from purely vertical to diversified. Subsequently, Tencent and the newly formed Tencent-Ecar Technology signed a strategic agreement, authorizing Tencent-Ecar Technology to operate Tencent's advertising business in the transportation industry.

From pure financial investment in 2015 to a privatization acquisition in 2020, to content and data sharing, traffic, and technological empowerment of Tencent-Ecar collaboration over the past few years, to direct business supply this year, Tencent's layout in the automotive internet industry is gradually deepening. This highlights the importance of Tencent-Ecar Technology in Tencent's automotive industry landscape and indicates some strategic considerations of Tencent's layout in the automotive industry.

What does Tencent value in Ecar?

Before answering this question, let's first understand the automotive internet industry. The automotive internet industry is a broad field that uses content and internet technology as carriers, focusing on automobile-related information, news, data, trends, technology, market analysis, and consumer behavior. Its goal is to provide valuable information and insights to automakers, dealers, consumers, and other stakeholders, helping them make more informed decisions. At the same time, it brings sales leads through content aggregation and traffic, creating commercial value for automakers and dealers.

It can be said that the automotive internet industry is like a 'connector', integrating various elements and resources such as people, vehicles, locations, traffic, data, and content, tightly connecting producers upstream in the industry chain, distributors downstream, and end consumers, demonstrating enormous 'connectivity' value.

Ecar is the most experienced player in this industry, founded in 2000 with 24 years of deep industry experience. It has vast content assets, user assets, data assets, as well as resources from automakers and dealers, deeply covering the entire scenario of users' automotive life and consumption chain, from car viewing, selection, purchase, use, replacement, to car enthusiasm. Taken individually, it is a mini-giant in the vertical industry. When embedded in the giant automotive industry landscape, it becomes a pivotal piece of the puzzle.

Next, let's look at Tencent's internet strategy, which has two keywords: connectivity and industrial internet.

'Connecting everything' is Tencent's goal. With communication and social networking as its core platforms, and WeChat and QQ as platform connectors, it builds an ecosystem that connects all people, information, and services. To this end, Tencent has created an open platform, and its connectivity strategy can be clearly understood through the following diagram. The foundation is the traffic entrance composed of QQ and WeChat; the middle layer includes games, advertising, payments, finance, and other proprietary businesses; the upper layer is an open platform connecting tens of millions of developers, partners, content producers, and users. Tencent used to handle this part itself but now leaves it to partners, achieving win-win results through strategic investments.

In terms of the 'industrial internet', Tencent believes that the industrial internet is a deepening of the internet development model. The internet has completed the connection between people, forming a consumer network. The internet+ extends connections to enterprises, forming external connections between people and enterprises, allowing enterprises to quickly deliver goods and services to users. The industrial internet further expands connections from a broad perspective to different industries and in-depth perspectives within enterprises, enabling the reorganization of elements and production and operation models around user needs, more effectively matching supply and demand. The industrial internet shifts the main body of internet services from consumers to institutions and organizations, better serving the B-end based on C-end experience. Its purpose is not and cannot be to replace other industries but to collaborate and upgrade, providing new momentum and rejuvenation to other industries.

It can be said that the automotive internet industry where Ecar operates and the key resources Ecar possesses are highly compatible with Tencent's 'connectivity' strategy and the layout of the 'industrial internet' strategy in the automotive sector: clarifying its advantages in the automotive field - To C content ecosystem and capabilities, and continuously converging them into Tencent Cloud itself.

In terms of the content ecosystem, Ecar has integrated with the Tencent system, establishing a vertical automotive ecosystem. Ecar content has become native vertical content within the Tencent ecosystem, with Ecar's professional car model database, original content, evaluation system, short videos, shopping guides, and 4S store discount information widely appearing on platforms such as Video Accounts, WeChat Search, Tencent News, and Tencent Video, deeply reaching over a billion users in the Tencent ecosystem.

After completing the construction of the automotive content ecosystem, Tencent can use content as a carrier to fully utilize the upstream and downstream resources connected by Ecar, collaborating to empower other partners in Tencent's automotive industry landscape. At the same time, starting from the information scenario, it collaborates with industry partners to improve various scenarios based on transportation and travel. It can be said that Ecar is an important tool for Tencent to build its automotive industry internet and implement its connectivity strategy in the automotive industry internet.

Will Ecar be more competitive after reshaping its ecosystem?

Tencent's layout for Ecar can be traced back to its strategic investment in 2015, followed by acquisition and privatization, and through four continuous improvements: Tencent+Ecar basic cooperation, Tencent+Ecar ecosystem cooperation, comprehensive Ecar upgrade, and Tencent-Ecar Technology. Tencent and Ecar collaboration has evolved from pilot cooperation to accelerated cooperation, then to deep integration, and finally to a new and reshaped ecosystem.

Up to now, Ecar's business has moved beyond verticality, completing diversified transformation and upgrading.

The author observes that the newly established Tencent-Ecar Technology will focus on four major business segments. Among them, Ecar continues to delve into the traditional vertical media track; Chuangyi Media is its new media agency service provider, responsible for new media businesses such as short videos and live streaming; Yihui Intelligence is its AI technology business, providing AI solutions based on scenarios for automotive industry customers through the capabilities of the AI Agent large model. Currently, there are no similar enterprises in the industry. In addition, the newly announced operation of Tencent's advertising business in the transportation industry has created a new core position for it within the Tencent system.

More importantly, reshaping the ecosystem not only means expanding the business scope of Tencent-Ecar Technology but also further strengthening its business depth.

In the traditional vertical media track, Tencent-Ecar Technology will deepen collaboration with Tencent in three areas: ecosystem expansion, user cultivation, and full-chain efficiency improvement. First, Tencent will further open up all its resources to Tencent-Ecar Technology, enabling Ecar content to more effectively and widely reach users in the Tencent ecosystem. Second, based on data insights and scenario integration, both parties will use algorithms to match users and content, reaching car-buying users comprehensively within the Tencent-Ecar ecosystem and influencing their purchasing decisions. Third, Tencent-Ecar Technology will innovate at the tool level to help dealers better acquire and convert customers.

The new media business is also a track that Tencent-Ecar Technology and Tencent attach great importance to.

According to the "2024 Full-Link Automotive Market Insight Report" released by QuestMobile, current automotive marketing methods are becoming more diversified, with traditional and emerging channels deepening their collaboration. Among them, automotive information platforms remain the main platform for automakers' marketing. The proportion of investment by new energy vehicle brands in instant messaging and microblogging social media industries has significantly increased, and the marketing value of short videos and live streaming channels has become increasingly prominent. In this regard, Chuangyi Media has created two flagship products: Ecar MCN and live streaming matrix. Its Ecar MCN leads the field of video account automotive content, already possessing full-ecosystem agency capabilities in the process of providing customers with comprehensive marketing solutions. At the same time, it has built an all-around live streaming matrix, forming three main products - official live streaming, influencer live streaming, and dealer live streaming, helping partner customers tap into the blue ocean of traffic on video accounts.

To the layout of AI new technology business and obtaining the operating rights of Tencent's advertising business in the transportation industry, after upgrading to 'Tencent-Ecar Technology', Ecar has gained ecosystem capabilities. And this ecosystem capability precisely makes Tencent-Ecar Technology more competitive.

If the automotive internet era 1.0 competed on community and scenario service capabilities, and era 2.0 competed on content and traffic, then with the entry and empowerment of large companies, era 3.0 is a battle of ecosystems, competing on players' ecosystem capabilities.

Relying on giants allows players like Tencent-Ecar Technology to not only enrich their business layout but also obtain resource support from giants in terms of traffic, data, and technology, further strengthening their weight in Tencent's strategic layout of the automotive industry internet. It is conceivable that when the business ecosystem is further expanded, Tencent-Ecar Technology will usher in a broader space for development. (Written by Zeng Xianyong)