Tencent to shut down content creation app just 3 years after rollout

Chinese tech giant Tencent Holdings Ltd. TCEHY plans to shut down its content creation app Kandian next Monday as part of a broader strategy to become more efficient, the South China Morning Post reported.

What happened: Kandian will shut down operations on Aug. 15 as part of “adjustments to business development strategy,” according to the report, which cites an enforcement announcement.

Tencent reportedly sent notifications to its users to back up the data. Certain services will remain accessible via the Mini World function of QQTencent’s original chat app, according to the report.

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why is it important: The move is seen as Tencent’s effort to scale back non-core operations and reduce costs following the company’s stagnant growth in a declining economy.

The company launched Kandian in 2019 to compete ByteDancenews aggregation app operator Jinri Toutiao and short video platform Douyinthe Chinese version of ICT Tacaccording to the report.

Kandian helps users create and edit images and videos they want to post.

The report pointed out that Tencent gave 3 billion yuan ($443.6 million) in grants to one million content creators, helping it attract 240 million daily active users to its apps in March 2020 alone, according to iResearch data.

Tencent earlier this year also decided to shut down its game streaming service as well as its NFT marketplace amid restrictive Chinese laws and turbulent market conditions.

price action: TCEHY shares ended Monday down nearly 1.8% at $37.81, according to data from Benzinga Pro.

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Jenny T. Curlee