Chinese tech company Tencent Holdings' Chairman and CEO Pony Ma Huateng paid his travel fare by scanning a QR (quick response) code via WeChat's payment function on a bus in Hefei, capital of East China's Anhui Province late Wednesday. The whole process takes only 0.3 seconds. Point-of-sale machines for passengers to pay their bus fees via WeChat are currently only available on two bus routes in the city. The user number of WeChat in China and abroad is more than 963 million. Photo: IC

China's Tencent Music Entertainment Group reported better-than-expected third-quarter revenue on November 11 as the streaming company added more paying users.

However, it recorded the slowest rise in a widely watched metric for its biggest business, social entertainment services, which executives attributed to growing competition.

The company's monthly average revenue per paying user from its social entertainment services unit rose 7.4 percent to 127.30 yuan ($18.20), its slowest growth since it went public in December.

"We recognize that it may be slightly below where we previously thought it would be," Tony Yip, chief strategy officer, said on a conference call. "That's primarily because of increasing competition that we are facing with the short video platforms."

Tencent Music competes with Alibaba-backed NetEase Cloud Music in streaming services, and with short video sites such as Bytedance's Douyin and Tencent-backed Kuaishou in social entertainment.

Although its music streaming unit has more users, the company's biggest revenue drivers are social entertainment services, including karaoke platforms, where users can live stream concerts and shows.

The social entertainment business reported 12.2 million paying users during the quarter, up 23.2 percent.

Yip said the firm will step up investment aimed at user growth, with a view to reach a younger demographic with content more appealing to them as well as initiatives such as offline singing competitions and partnerships with game studios.

The company also said it is exploring opportunities to take its services outside China and hopes to introduce monetization methods such as virtual gifts to Thailand.

Although Tencent Music's user base is nearly three times that of world's largest music streaming service, peer and stakeholder Spotify, its paying users are comparatively fewer.