A Guide To Understanding The Chinese App Market

In the land of the rising sun, beholds the credulous China. With a population of 1.3 billion people, China has become the mecca of manufacturing.  America’s population is just a fraction of that. With such a volume of people, means a volume of consumers and with all that volume, beholds the China app market.

Currently, China has the largest smartphone user base in the world at a whopping 521.7 million users. In addition, it has experienced 600% growth–an astonishing rate. This is one of the main reasons why many businesses want to tap into China’s mobile app market. Yet, while most businesses are familiar with the U.S’s app market–which consists mainly of Android, Apple and Windows, China is much different.

China does have some skeletons in the closet, especially when it comes to political and market factors, i.e., regulatory barriers, fraud, low-spending customers, cyber security and excessive competition. This makes cracking the code feel like you’re about to take a trip up Mount Everest. But don’t worry, here’s an intro that should give you an idea of how to approach it proactively.

Understand Chinese culture

The U.S. is the most diverse nation on the planet. This means, app makers can really make an app for just about anyone in America–and if it’s good, there’s probably a market for it. In China, app makers must understand Chinese culture. There are strongly-held traditions and beliefs that can spell death for the uninformed app maker.

The good news is China has a huge population, but there are differences in locations. To illustrate, cities such as Guangzhou, Shanghai, and Beijing are similar to the U.S. in the sense that customers are tech savvy, with a high percentage of smartphone ownership. Yet, outside of these urban centers, China has millions of less affluent customers who use low-cost Android phones. This is why companies must have a detailed strategy for winning business in both markets.

For example, you need to inspire your audience. You might want to partner with a local company to maximize the potential of your app. Also, a local company can help you determine opportunities while teaching you about the local culture and differences.

Get to know the Chinese mobile app market

While Google is the biggest player everywhere else, in China it’s a small fish in a large pond. In fact, China has over 200 mobile app stores. Google is restricted because they have not been able to follow through with some of China’s cyber policies. Here is a list of China’s top 10 app stores:

1. Myapp (Tencent)
2. MIUI app store (Xiaomi)
3. 360 Mobile Assistant
4. Baidu Mobile Assistant
5. Huawei App Store
6. Oppo Store
7. Vivo
8. Google Play
9. HiMarket
10. Wandoujia

According to TalkingData, Google Play has a share of 15.4 percent of the market. The rest of the market consists of third-party app stores. Moreover, many phones sold in China don’t include Google services. If you instead focus on loading your app into the top 10 Android stores, you can cover 90 percent of the market.

The largest phone carriers are China Mobile and China Unicom. The biggest manufacturers are Xiaomi, Vivo, Oppo and Huawei. According to GSMA, there were 913 million smartphones in use in China at the end of 2015.

Advertise differently

China does not have Facebook or Google. As a result, you need to take a different and more creative approach with regard to marketing. In America, enterprise mobile development usually takes the Google ad or Facebook ad route for educating the public on their app.

In China, you’ll need ongoing investment in Chinese ad networks such as Baidu, DSP and Tencent. In addition, look into advertising on popular Chinese search engines and chat apps. If you have the budget for it, you might hire a local PR firm to handle your promotions. Just make sure you choose a company with a background and success in mobile app advertising.

Revenue share

The Chinese app market is divided between stores and phone carriers; all of them are government-owned. As a result, the revenue sharing you receive depends on the type of transaction made in the app. Furthermore, local Android stores have developed their own SDKs for unique payment solutions. Most of them require you use their payment solutions. Yet, might be able to get away with using a third-party payment solution such as Alipay to keep things a bit more consistent.

In terms of revenue sharing, Google play and Apple may charge 30 percent of a transaction. On the other hand, Android stores in China usually take 50 percent of the revenue. This is important to note when determining your development, operating, maintenance and advertising budget.

Plus, there are times with a transaction may involve a local carrier–in this instance, 70 percent of a transaction’s revenue will be taken and split 40 percent to the store and 30 percent to the carrier. If you make a deal with a specific store to advertise on your behalf, they may take up to 90 percent of your revenue. Here is some information on the store’s SDKs:

• Carrier billing only–30 percent
• Alipay (Non-gaming apps)–1-8.2 percent
• Store SDK–50 percent
• Store SDK and Carrier billing 40 percent plus 30 percent

As you can see, there are some hurdles to jump when entering the Chinese app market. It is not as streamlined as it is in America. But, if you can get into some of the most popular app stores, you will tap into an enormous market.

This post was submitted by Ryan Stewart, a top notch digital marketer and SEO guru. He works with clients from all over the world to increase branding and sales in the digital world. You can find him leading an extraordinary team at WEBRIS.