Chinese President Xi Jinping (L) shakes hands with Apple Inc. CEO Tim Cook (C), as Tencent CEO Pony Ma (R) looks on, during a gathering of CEOs and other executives at Microsoft's main campus in Redmond, Washington, Sept. 23, 2015. REUTERS/Ted S. Warren/Pool

BEIJING — Jack Ma, the charismatic head of the Alibaba e-commerce platform, might hog the limelight. But a darker horse has just overtaken him in the race to be China’s richest man.

Ma Huateng, also known as Pony Ma, is now listed by Forbes as China’s and Asia’s richest man, and the 18th wealthiest globally.

He is publicity-shy and low-key, but a man with a considerable and growing reputation.

Although no relation to Jack, Pony Ma is of the same breed: one of the Internet innovators whose companies have risen to become among the largest and most powerful forces in the global IT industry.

The company he founded, Tencent, is already a huge force in global gaming, while its WeChat messaging and payment app is transforming daily life in China. His rise exemplifies China’s transformation from copycat to global IT innovator.

On Tuesday, Forbes's list of the world’s billionaires estimated Pony Ma’s net worth at $37 billion, just ahead of Jack Ma’s $36.4 billion, based on real-time share price calculations. Bill Gates, with $89.8 billion, topped the list.

Alibaba and Tencent have benefited from China’s emergence as the world’s largest Internet and e-commerce market, but they have also driven that expansion themselves. And in a ruthless and rapidly changing market, they have had to become innovators par excellence just to survive.

“What strikes me as great about Tencent is how original they are,” said Jeffrey Towson, a private equity investor, Peking University professor and author of several books about Chinese business and consumers.

“It's not a one-hit-wonder company like Facebook, PayPal and so many others,” said Towson. “They keep hitting another ball over the fence every two to three years.”


A Tencent sign is seen during the third annual World Internet Conference in Wuzhen town of Jiaxing, Zhejiang province, China, Nov. 16, 2016. REUTERS/Aly Song

As Business Insider pointed out, when Ma founded Tencent in 1998 at age 26, its first instant-messaging product, QQ, was essentially a copy of the Israeli system ICQ, tweaked for the Chinese market.

But Tencent soon found a way to monetize its growing online audience through gaming, getting users hooked and then selling them services to unlock additional features within those games. In the process, Tencent ended up creating a “better business model than its Western peers,” the Economist wrote in 2014.

Today, it dominates the global gaming market, having bought American company Riot Games, maker of the enormously popular League of Legends, as well as Finland’s Supercell, maker of another popular game, Clash of Clans. Yet many users would not recognize the name of the world's biggest games company.

At home, its WeChat messaging and mobile payment service has developed into one of most innovative and multifunctional products in the online world, with 938 million monthly active users, according to the company.

Today Tencent is the fifth-largest Internet company in the world by market capitalization, sandwiched between Facebook and Alibaba, according to website Statista. It made an operating profit of $2.8 billion on revenue of $7.2 billion in the first quarter. Ma has an 8.71 percent stake, making him its largest individual shareholder, Quartz reported, citing FactSet data.

Nicknamed a “Swiss-army knife for life,” it allows its users not just to send text and voice messages, images and files, but to live almost their entire life online. On it, you can top up your mobile phone, give to charity, hire a shared bicycle or a car, book a train journey or a flight, arrange a hotel stay or reserve a seat at the movies. You can flirt with people nearby, send a friend money and pay for almost everything.

Even street vendors selling roasted horse chestnuts accept WeChat pay in China.

 


The icons for Tencent Holdings Ltd. applications WeChat, clockwise from top left, QQ, JOOX, Tencent News and Tencent Video are shown on an Apple iPhone in Hong Kong, on July 26, 2017. (Anthony Kwan/Bloomberg)

It may not be the radical innovation of, say, inventing gunpowder, but it’s the sort of incremental innovation that more often powers economic growth, said Duncan Clark, a businessman, Internet expert and author of a book on Jack Ma. And it has left companies such as Facebook rushing to imitate its success.

“Some people say China is not innovative, but it is,” he said. “It is all about adapting existing technologies, using one technology in a new environment. The level of empowerment that WeChat delivers through mobile is unbelievable.”

So what is Tencent’s secret?

Three things, said Towson: “Management, which is just outstanding. The speed and ruthlessness of China's Internet space: Your chessboard to keeps changing. And the development of the markets and consumers.”

Pony’s surname Ma is the Chinese word for horse: hence his nickname. But his reputation as a dark horse is well deserved. While Jack Ma traveled to New York last November to meet President-elect Donald Trump and promised to create 1 million American jobs, Pony Ma has stayed resolutely out of the limelight.

Wary of the spotlight, he seldom speaks in public, and then only in Chinese. “He is a very low-profile guy, and publicity-shy in Chinese as well as in English," said Clark. "He does understand and speak some English, but he prefers not to."

When he does talk, it is to underscore how Tencent’s ability to react quickly to a demanding and rapidly changing market is the key to its success — an adaptability and fleetness of foot that foreign companies struggle to replicate.

“This world is very cruel, including the mobile phone market,” he said in a 2015 speech at the University of Hong Kong. “Nokia was like the sun at high noon ... [but] no matter how big a giant is, he can fall down at any moment.”

Of course, Tencent and its local IT peers did have another big advantage when it came to their ability to harness the growth of the online market in China: censorship and other restrictions that have kept Facebook and other Western companies out.

Today, WeChat messages are closely monitored by government censors, and its servers will even automatically block messages on politically sensitive topics, according to a report from Citizen Lab, a cyber-research group at the University of Toronto.

“In the end, online companies have to play by the rules of the land in order to find a way forward,” Pony Ma told NUS Business School in 2012, calling for them to “act responsibly” in online security management. “Otherwise it might lead to hearsay, libel and argument among netizens, not to mention between countries,” he said.

Pony Ma is a member of the National People's Congress, China's parliament, which meets for a fortnight every year, largely to act as a rubber-stamp for policies already adopted or put forward by the Communist Party government, and to add a veneer of democratic respectability to the one-party system.

You don’t become China’s richest man if you can’t play by the rules.