How to launch an app in China

How to launch an app in China

China represents a massive, un-ignorable opportunity for app makers across the world and has reigned as the world’s top mobile market for two years. It topped 500 million smartphone users in 2014, far surpassing the U.S.’s 163.9 million, and accounted for over 15 percnt (or $7 billion) of global mobile Internet ad spend in 2014, representing an astonishing 600 percent growth.

Despite its promise as a goldmine for mobile apps, the Chinese market has been held back by a number of factors, including regulatory barriers, device fragmentation, fraud, and low-spending customers. While many of those issues have improved significantly in the past couple years, challenges remain. As with any market, cracking the code to the top of the app charts is not easy. It requires a thoughtful approach to the unique dynamics of the market.

App makers must first understand Chinese culture, as well as its dominant billing platforms, business models, and pricing strategies. In terms of the latter two, be prepared to compete in a market that is driven by sheer user numbers. Competitors could be well funded and willing to invest tens of thousands of USD a day to incentivize downloads in order to rise to the top of the charts and grab eyeballs.

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It is also hard to compete with “free.” When your competitors are not pressured to monetize, you might have to think twice about your tradeoff between monetization and monthly active users.

Behind the Great Firewall

The Android market in China is huge. According to Chinese web giant Baidu, Android has 79 percent market share. However, it is also extremely fragmented. There are more than 100 Android application stores and making your app visible is extremely difficult. With around 18 percent market share in China, the iOS market is extremely interesting, less crowded and as you may have seen on Tim Cook’s latest Apple announcement, is a growing point of interest for the company.

Instead of launching on both platforms, prioritize one that fits better with your business goals and focus on it. In my experience users on iOS tend to spend more than Android users. If your business model requires paying users – meaning it is premium or subscription-based – it is better to focus on this platform over Android.

A great way to get up to speed fast is by hiring local talent. Many companies choose a firm like iDreamSky that does all the work to bring them to China. Another option is to hire a local partner with a great understanding of the market and empower them to make decisions.

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Local partners not only bring expertise, but also help overcome language barriers. Most meetings will happen in Chinese, and so it is almost impossible to run the business without local help. Evernote has gone a step further and even has a whole Chinese product team tweaking their app for the market.

Understand local concerns

In addition, make sure you don’t tackle the Chinese market without good UX and content that will inspire your audience. For example, Chinese parents are more education focused and more concerned with nearsightedness than parents in the U.S. or LatAm markets.

Addressing this concern, PlayKids launched audio books for kids that introduce English language content to children without requiring more screen time and we hired a Chinese native to lead the project. Our country manager proved vital in supporting us to understand the local culture, differences and opportunities.

After deciding on the platform you’ll focus on, think about how to advertise. There is no Facebook or Google in China, so you have to be creative when trying to get app installs. Investigate other platforms like search engines and chat apps. And while Apple operates a global model working with developers, the Android ecosystem varies considerably from country to country.

Google Play is restricted in China, which means reaching those 400 million Android users necessitates dealing with 20+ large and small Android App Stores to distribute your app. You need to rise to the top of the charts in order to get organic growth, but this requires ongoing investment with ad networks. Invest in Chinese ad networks such as Tencent DSP, Baidu DSP,  where developers can market and monitor their installs.

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Marketing should also entail establishing a presence on Chinese social networks and messaging apps, including  QQWeChat and Weibo, as well as on major Chinese Youtube sites which still have 800 million monthly active users in China. A presence on these sites and apps will help engage your audience and reinforce word-of-mouth.

Also, keep in mind that chatrooms and forums, like Baidu Tieba and Zhihu, are still mainstream venues in China for people to share experiences and opinions.

Equally important as solid research and strategy before launching is what you do once you’ve launched and found traction. If you experience success in China, you will quickly find knockoff competitors building on what you did right, and more importantly, what you’ve done wrong or neglected. To have a fighting chance, you need to stay ahead of them by frequently updating.

Take Uber, for example. While the dominant player in the U.S., Uber has struggled to gain a solid foothold in China where Alibaba-backed Kuaidi Dache and Tencent-backed Didi Dache recently announced a merger that has led to them controlling 99.8% of the on-demand ride market.

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This fierce competition means it is critically important to listen to local users. Uber’s competitors were able to gain so much ground so fast because they launched features that made their apps better for the local market, such as the ability to book a driver and evaluate the quality of the car, the smell, the driver, etc.

The need for speed

Speed is also critical. Chinese competitors have abundant, affordable talent and move extremely fast. This means that spending too much time planning or getting caught in year long business cycles is a mistake. Foreign publishers will have to plan early and execute swiftly. Take risks, fail fast, fix it, and start again.

Furthermore, once you have found traction in the market it is taking extra steps to integrate into the country, like creating a legal entity in China. This is because companies can only use Chinese servers if they have a legal entity or partner in China. When first launching, it is best to use your existing infrastructure rather than setting up a legal entity. Because it takes time for data to travel, it’s important to find creative solutions to keep things moving fast.

Similarly, if you’ve found traction it’s a very smart idea to create a Chinese-language name for you app to enable easier searching. Evernote again is an excellent example of how to do things; it now hosts its servers locally in China and has a Chinese version of its flagship app called “Yinxiangbiji” (印象笔记).

This is a good start but what strategies and tactics do you think should be used when entering China?

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