Abstract: The Internet industry has increasingly become an important engine for stimulating the development of the global economy. The rapid development of Chinese Internet companies has attracted widespread attention. Throughout the history of the development of Chinese Internet companies, almost every Internet company has a long-term follow-up development of the US "Silicon Valley Model". And almost all successful companies have found out in the process of growth that is completely different from the original survival and business model. Although the disputes of “plagiarism and innovation” faced by Chinese Internet companies in the product development process are still continuing, the Internet companies represented by Tencent, the research object of this paper, are growing into world-class enterprises. How to explain the above-mentioned "paradox" development of Chinese Internet companies? What is the product innovation mechanism of Chinese Internet companies? What are the development characteristics of China? These are the core issues guiding the development of Chinese Internet companies. However, to date, the theoretical and practical circles have not yet given a clear answer to these questions.This paper intends to use the "innovative value chain" as the theoretical basis to select one of China's fastest growing Internet integrated service providers -Tencent Holdings Co., Ltd. (“Tencent”), which is headquartered in Shenzhen, as its research object. Since the diachronic development of product development, the company has selected the product innovation event with historical turning point as the analysis unit, and the three stages of the innovation value chain as the analysis framework. What are the core constructs of each stage analysis and different constructs? The key elements of “why” and “how” change the main line to develop cross-unit case analysis to reveal the internal mechanism of China's Internet enterprise innovation value chain.This paper takes the innovation value chain theory as the analysis framework, based on the analytical framework of “creative creation-creative transformation-creative communication” proposed by Hansen and Birkinshaw (2007) and conducts nested multi-case analysis of Tencent's product innovation events from 1998 to 2016, and tries to explore the innovation mechanism of Chinese Internet companies. The research finds that: First, the creative production stage focuses on the analysis of creative architecture elements from a creative perspective. The static perspective analysis shows that the creative categories include both transplanted and derived creatives. Dynamic perspective analysis leads to creative reorganization through dynamic combination and gradient advanced approach. The evolution process is finally completed with breakthrough ideas. Secondly, the creative transformation stage focuses on analyzing the development model elements from an organizational perspective. The static perspective analysis leads to the organizational level of the product manager system and the project-level small team development model. The dynamic perspective analysis leads to the enterprise-level horse racing mechanism and project level. The micro-cycle model enables agile management to improve innovation performance. Thirdly, the creative communication stage focuses on analyzing the elements of the interaction mechanism from the perspective of users. The static perspective analysis leads to the emotional demand mining based on Chinese-style understanding to lock the emotional communication element. The dynamic perspective analysis leads to the advanced mode driven by user experience and continuous optimization. The evolution of services, with a platform-based product feedback system to quickly find new product development appeals.The theoretical contributions of this paper are as follows: (1) By deconstructing the three-stage model of “innovative value chain”, this paper extracts the key elements of the three-stage interdependence in the process of product innovation in Chinese Internet enterprises, and deeply analyzes the phased changes of each element, making The evolutionary characteristics of the innovation value chain are specifically revealed. It provides a preliminary integrated theoretical analysis framework for the dynamic research of innovative value chain theory. (2) This paper argues that in the different stages of the development of Internet enterprises, the characteristics of the three stages of the innovation value chain and the impact on the innovation performance are different. Therefore, when observing the product innovation behavior of the enterprise through the perspective of the innovation value chain, it is necessary. A more comprehensive understanding of the stage of development and the characteristics of the previous innovation value chain will enable a more accurate understanding. This conclusion makes up for the existing research that overemphasizes the development of the three-stage equilibrium advantage of the innovation value chain. (3) Some studies have pointed out that late-developing countries can catch up with and surpass technology through integrated innovation, and affirm that integrated innovation is an effective path for product innovation in late-developing countries, while few studies have developed innovative ideas for Chinese Internet enterprise products from the perspective of integrated innovation. The source is analyzed for this phenomenon.Looking at the development process of Chinese Internet companies from the perspective of dynamic development, there are also some characteristics of integrated innovation in the stage of creative generation: firstly, not simple imitation, but re-integration of transplant ideas; Secondly, in the process of creative integration Carry out secondary innovation and achieve breakthrough innovation. Due to the rapid development of the industry characteristics of the Internet industry, it is an inevitable choice to quickly transplant product innovations that have been tested by the market in the process of catching up with the development of the company, and it is also an inevitable choice for Ma Huateng’s “disputed first” product innovation logic.

Key words:  internet enterprise, product innovation, innovation value chain, case study