China is expected to overtake the USA as the largest smartphone market this year, with over one billion mobile phones in the country already. That makes it an obvious target for UK app developers, looking to captalise on one of the worlds largest markets, but it isn’t easy.
There are many problems to confront when taking an app to the Chinese market. Many people make the mistake that they can simply market their Western product and it will take off. For every product the Chinese market loves for it’s “Western” appeal, there are millions which it rejects.
The Chinese market has far different tastes to the European or American market. Local competitors know their market far better. For this reason, Chinese companies are looking to act as ambassadors to Western businesses, with some of them becoming powerful partners and even co-producers of apps. These companies will be given access to the code and will localise the app, making it more appealing to the Chinese consumer. These deals can be lucrative, but some app developers may be wary of the consequences of entering into such partnerships.
Poor monetization is also an issue. Chinese users are used to free apps, but they will spend away once they are hooked. Even if you are only charging a tiny amount after the app has been downloaded, it will amount to a large figure in such a huge market. However, the Chinese market is chaotic in terms of distribution and payment. Android in particular suffers, with most users not able to access the Google Play store. Instead, they download apps and in-app content from one of hundreds of third-party providers, who process 60% of China’s downloads. UK app developers therefore have to integrate a number of payment systems to make their app available to the many different providers. It is hugely complicated, time-consuming and a big leap from the simplicity of just two main stores.
Monetization improved in late 2012, when the large Chinese phone companies reviewed their billing programs, making it easier to bill customers and easier to offer paid content. This is part of the reason the market has grown to be worth over $1.2billion, with some companies taking as much as $4.5million per month.
There are still many stumbling blocks if you want to head to China though. Besides having to tailor your apps to the Chinese consumers, myriad third-party providers and the fact that Chinese users do not like to pay to download, app developers are faced with weak intellectual property enforcement, meaning local competitors will unashamedly undercut them with an identical product. This is not just true of software, with Apple suffering from the sale of copies of their phones running on Android. This may be changing, with Chinese companies likely to want better protection too as the market grows.
Sometimes, the local companies simply take inspiration from their Western competitors, but they deliver products more tailored to the Chinese market, not to mention cheaper. An unlocked iPhone will set a Chinese buyer back nearly $800, almost double the US retail price. Android inspired phones are being sold, but with an entirely different and incompatible OS. Apple have a good relationship with the Chinese government, but Google faces an uphill battle to have their marketplace made more widely available. They will have to totally overhaul their review system to meet the standards of Chinese censorship.
There are many obstacles to navigate, but the reward is huge. Worth it, if you are prepared to put in the effort to confront the many problems you are bound to face.
Image credit: Cristiano Betta