WPIC's Cooke: Tencent and Alibaba to see strong ad spending in China

Tencent and Alibaba are expected to see strong advertising spending in China as domestic stimulus trickles down. WPIC CEO Jacob Cooke discusses the Chinese e-commerce environment with Bloomberg's Caroline Hyde and Ed Ludlow on "Bloomberg Tech."

Tencent and Alibaba, two of China's leading technology companies, are poised to see significant growth in advertising spending as domestic stimulus trickles down. Tencent, known for its gaming and social media platforms, reported strong second-quarter earnings, driven by robust gaming performance and AI deployment across its services [1]. Alibaba, the e-commerce giant, also demonstrated substantial growth, with its IPO surging 38% on its debut [2].

Tencent's Q2 revenue grew 15% to 184.5 billion yuan, exceeding analyst estimates. The company's gaming segment saw a 17% increase in domestic revenue, while international gaming revenue climbed 35%. AI has been a key driver, enhancing user engagement and personalization [1]. Marketing services revenue also surged 20% year-on-year, primarily due to AI-driven ad targeting [1].

Alibaba's IPO was a resounding success, with its shares surging 38% on the first day of trading. The company raised $21.8 billion, surpassing the $17.8 billion raised by Visa's 2008 IPO and Facebook's $16 billion IPO in 2012 [2]. Alibaba's business model, combining sales, merchandising, and financial services, has created substantial demand for its shares, reflecting investor confidence in its growth prospects.

The Chinese e-commerce environment is expected to benefit from the government's domestic stimulus measures, which are likely to boost consumer spending and advertising budgets. Both Tencent and Alibaba are well-positioned to capitalize on this trend, with their strong AI capabilities and extensive user bases. Tencent's WeChat and Alibaba's Taobao and Tmall platforms serve as primary channels for digital advertising, making them attractive destinations for advertisers.

While there are concerns about potential seasonal slowdowns in earnings momentum, the strong performance of both companies has reinforced investor confidence in their strategic directions. Tencent's ability to exceed expectations despite increased AI spending is seen as a positive signal of its long-term efficiency and adaptability. Similarly, Alibaba's successful IPO and robust revenue growth indicate its strong position in the global e-commerce landscape.

The continued growth of AI and e-commerce in China presents significant opportunities for advertising spending. Tencent and Alibaba's strong performances suggest that they are well-positioned to benefit from this trend, making them attractive investments for those seeking exposure to the Chinese market.

References:

[1] Reuters. (2025, August 13). China's Tencent beats Q2 revenue forecasts as gaming, AI fuel growth. Retrieved from https://www.reuters.com/world/china/chinas-tencent-beats-q2-revenue-forecasts-gaming-ai-fuel-growth-2025-08-13/
[2] USA Today. (2014, September 19). Alibaba surges in first day trading. Retrieved from https://www.usatoday.com/story/money/business/2014/09/19/alibaba-surges-in-first-day-trading/15828389/