Tencent setting up regional hub in Singapore

A WeChat Pay sign in Guangdong province last month. Tencent, which operates WeChat, is eyeing further expansion into South-east Asia. PHOTO: REUTERS
A WeChat Pay sign in Guangdong province last month. Tencent, which operates WeChat, is eyeing further expansion into South-east Asia. PHOTO: REUTERS

Chinese tech giant Tencent Holdings is setting up its regional hub in Singapore as it expands further into South-east Asia.

The move comes as geopolitical tensions with the United States and India have prompted tech heavyweights from China such as ByteDance and Alibaba to refocus their growth efforts in Singapore and the region.

Tencent said yesterday that it is expanding its presence here to support its growing business in South-east Asia and beyond, with the new office a "strategic addition" to facilities in Malaysia, Indonesia and Thailand. "The Singapore office will also enable us to capture potential from the rapid pace of digitisation and meet the demand for Internet-based services and solutions in Singapore," it added.

Tencent, which operates super-app WeChat, has been considering shifting some business operations, including international game publishing, out of China, sources told Bloomberg.

Its hiring site and postings through recruiters on Singapore's national jobs portal MyCareersFuture.sg notes that it has openings for software engineering, business development and legal roles here.

Mr Florian Hoppe, who leads the Asia-Pacific digital practice at consulting firm Bain & Company, said the commitment of Chinese firms like Tencent to set up here further solidifies Singapore's tech credentials.

"Given the current vector of the labour market, this is typically a net positive for the whole economy (with) more high-value jobs in the country," he said, noting that there are a mix of jobs on offer and not all are specialist tech-related roles.

Accenture software and platforms industry lead Shaikh Ismail noted: "By bringing their extensive global expertise and knowledge to our shores, tech companies can help Singapore businesses create new business models and compete more effectively, and create products that deliver on an international scale."

The Tencent move also puts renewed focus on the local tech talent pool.

Professor Wong Poh Kam from the National University of Singapore's Business School said the immediate impact of the entrance of these Chinese tech giants would depend on the roles and pay packages they offer. There could be a short-term hit to local tech companies as they may not be able to compete financially with the Chinese firms for top tech talent, he noted.

Deloitte South-east Asia technology sector leader Nicholas Chan said the education system will need to meet the demand for tech engineering talent - both in terms of quantity and quality - in the immediate to medium term.

But for the longer haul, supply shortages will be addressed by either importing overseas talent or through workers coming through local institutions, he said.

"For Singapore to continue its role in the tech industry, it needs to be an innovator and incubator for home-grown start-ups to access the broader Asean market and rely less on tech firms with headquarters-cum-sales and administration offices reporting back to China or the US," Mr Chan added.

The focus for Chinese firms in their expansion here is the regional market and opportunities to capture the growth in South-east Asia's emerging markets, Prof Wong said.

"As they grow more in the region, they probably need to hire more people who have connections (to) or know-how to expand in the region," he added, noting that knowledge of regional languages would likely be a valued skill and could be an area that Singaporeans look to improve on.

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A version of this article appeared in the print edition of The Straits Times on September 16, 2020, with the headline Tencent setting up regional hub in Singapore. Subscribe