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06. September 2013 by Tonto

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Western App, Chinese Market


By the end of 2014, China will be home to over 500 million smartphone users, making the nation the single largest app market in the world, with an approximate worth of $1.2 billion. Unsurprisingly, western app developers look to China as a revenue source, but while the potential rewards are great, so are the obstacles.

 

INTELLECTUAL PROPERTY THEFT

Rampant piracy is the main objection Western app developers raise when discussing China. There’s no question the country is home to prolific and well-established intellectual property theft. If you own a successful Western app, chances are good a pirated version of your work exists in China.

Some argue Chinese piracy isn’t going away, so why not enter the market anyway and try and wrestle some profits away from the pirates? Others mistakenly assume China’s app ecosystem must be completely unregulated because of high piracy rates. In this, they’re wrong.

 

COMPLEX, SEGREGATION AND REGULATED

Don’t expect giant app markets like Google Play or iTunes in China. Instead, over 200 different app markets exist. Some target specific cities or locations, while others target specific groups and demographics. If it was possible to find an app market entirely devoted to brakes for Mustangs, you’d find it in China.

Each app market has its own regulations, QA process and certification requirements. Part of any successful China app campaign must include identifying the app markets best suited for your product, because trying for a position in all markets will spread your campaign too thin.

 

PAYMENT AND PROFIT PROBLEMS

China remains, in large part, a cash society. Credit and debit purchases may be the norm in the United States, but in China they’re the exception.

This makes app downloads and in-app purchases more complicated. While online purchase services such as Alipay exist, most app purchases are billed on the user’s mobile phone statement. Because of this, you’ll need agreements with the country’s major mobile providers.

In addition, expect to pay a large percent of your app profits in fees. In addition to the usual app market 30 percent cut, the government demands up to 20 percent of profits in taxes and regulatory fees.

 

LOCALIZING YOUR APP

Localization issues go much further then translating your app into Chinese (or more accurately, Cantonese and Mandarin). Staples of the Western social media world such as Twitter and Facebook are blocked in China. Instead, you’ll need to localize your product to match the needs of local social media sites such as Sina Weibo, Tencent Weibo, Renren and Kaiixin001.

You’ll also need to consider local cloud services. At present, Chinese users lack access to global cloud services, with Microsoft Skydrive offering one possible exception. Local cloud service such as Baidu, Tencent Huawei and KingSoft offer solutions, but bear in mind their services lag behind global technology expectations.

Western developers face significant challenges if they want to access the Chinese app market. The potential rewards of tapping into the world’s largest mobile market, however, should not be underestimated.


About the Author: Carl is a freelance writer with a million interests. He loves his job – one of the only ones that lets him wear so many hats!

Image Attribution:  Chinese Flag courtesy of Peter Griffin from publicomainpictures.net.