A High-Growth Mobile Economy
With 150 million smartphones by end of year, 5.5 billion downloads, and double-digit growth in app and mobile ad sales, the China app market appears to be a gold-laden opportunity for iOS and Android developers operating anywhere in the world. The proliferation of 700,000 apps combined with slower absolute growth in smartphone adoption has made the US and Euro markets increasingly competitive. Developers and mobile marketers can no longer afford to ignore the China opportunity .
A Complex Local Ecosystem
Of the estimated 60 million iOS devices operating in China, only 10 million have a registered account on the Apple App Store with a credit card attached. More than 50% of those devices are jail broken, giving leverage and market share to third-party iOS app markets. Between these independent markets, 8% of Apple App Store paid apps—about ~20,000 apps—are found in pirated (and usually free) form. Because Apple’s China App Store does not require a credit card to create an account, shuabang companies have emerged to sell installs and user ratings’ to the highest bidders.
Of the 140 million Android devices operating in China, less than 10% are registered with Google Play, the official Android app store. This is in large part because Google has made a strategic decision to not release a China version of Google Play. The result has been an explosion of third-party Android app stores, with dozens in existence today.
Whether iOS or Android, Chinese mobile users’ show a large preference for Chinese-language products. Close to 50% of the Top 25 most downloaded apps in China have Chinese-language names. The majority of popular apps in Asia—such as Dianping, QQ Messenger, Weixin, PPS and others, are only popular in Asia, emphasizing the importance of app localization.
To take full advantage of the China opportunity, foreign developers will need to overcome three key challenges:
1) A fragmented and opaque aggregate app market, especially for Android.
2) A strong preference for Chinese-language apps and marketing channels.
3) Chinese users’ reluctance to pay for mobile products and services.
By innovating marketing and monetization strategies that play to the set of marketing channels and consumer behavior unique to China, foreign developers and mobile app companies can overcome these challenges.