App Market in China

08Jul2015

As Chinese continue equipping themselves with mobile phones at a very fast rate, the app market in China is enjoying a similarly large growth. Today there are 1.29 billion mobile users in China, and that mobile phone market is fueling the app market. Recently, with the success of the iPhone 5 (featuring a larger screen), the number of apps downloaded on the IOS store has reached record levels in China. This has been pushed to the extent that the Chinese are now downloading more IOS apps than the US. The app market is one of the most dynamic markets in China and is producing sky-high revenues.

The huge potential in app development is clearly demonstrated by the $200 million invested by Alibaba group into Snapchat and the $15 billion raised for the development of China’s largest Uber rival, DiDi DaChe. For example, more than 75% of the Chinese game industry’s revenue is attributed to mobile game apps. Apps are delivering new opportunities that are inspiring the largest entrepreneurial groups in China.

Trends in the Chinese app market

Despite having many apps imitated from the US such as Baidu browser, Baidu Maps and Baidu Photo Wonder, effectively identical in function and sometimes even look to Google apps, the Chinese are welcoming unique and innovative apps. China is displaying an advantage in terms of payment apps over any other region, partly because credit cards are not very widespread in the country. These payment apps are powered by the demand for getting things delivered at home. Alipay saw the fastest growth in the last few years, however new apps are taking over, such as Tenpay, Bestpay and Lakala. This year Lakala is seeing a growth of 20%. Another type of app that is particularly successful on the app market in China concerns language classes. According to China Internet Network Information Center (CINNIC), in 2013 there were more than 200 million people using their mobile device to access some form of Mobile Learning content.

The app market stretching business implementations

In addition to using phones frequently and in large quantities, China has the largest 3G subscriber population in the world. Their number is estimated to be 1.4 times greater than the US. As a result, apps requiring access to 3G Internet are developing with more ease in China. Wechat, for example, has reached 549 million monthly active users, with the vast majority located in China. The QQ international app is the 2nd largest messaging app and accounted 321.8 million users. The popularity of those apps is enabling new opportunities for businesses, as they are more than just messagins apps. Brands are using social media apps to reach the young generation, suggesting discounts, as well as developing and promoting the image of the business.

Chinese app market transformations

The Chinese app stores are performing 2/3^rd of world’s downloads and amongst them 2/3^rd of apps downloaded are in Chinese language. Translating an app into Chinese before promoting them on the Chinese app market is essential to ensure large download amounts. Furthermore, QR codes are very popular and commonly used to spread apps to consumers. Their utilisations should be analysed closely in order to promote an app in China. Unlike the West, Android users on the app market in China have a choice of more than 200 android app markets. Some surprising apps appear across the platforms. For example, an app called Didi Da Ren (Didi hit people) enabled customers to hire a thug to beat up a chosen target, in a rather twisted reinterpretation of the Didi Dache car hiring service. This app has since been banned, but it does show that there is space in the app market for virtually any sort of service, and launching on an app store is comparatively simple.

The perspective of the rise of a new, highly profitable and difficult to control market is being eyed closely by the Chinese government. For the first time, the Chinese government has put into place regulations for messaging apps: from now on all Wechat users must agree to comply with a strict set of regulations governing online behaviour. According to Chinese representatives the regulation will ensure “building a clean cyberspace.” Government tampering is likely to cause significant damages to the app market, though a thriving grey market is expected to continue growing.

Sources: