This post has two parts. If you wish to know more on the Chinese app market, I recommend you read this post as well: What ‘Pokémon GO’ Can Teach Us About China’s Mobile Market.
On my previous post I explained how the western Android market you know is vastly different from the one in China. Several major factors impact this market’s complexity and I’ll outline them here at the macro level.
Regulations are almost synonymous with “China”, and whenever somebody talks about doing business in China they talk about what kind of regulations they have to comply with. By the way, as every country has its own regulations, it’s interesting to compare those with China’s regulations system (any reader perhaps familiar with a countries’ regulations ranking of some sort?)
The mobile app market has its own regulations as well. It starts with each store’s registration process, which is more complex than just opening an account on Google Play. There are different company documents you need to hand in. For example: business license translated to Chinese, picture showing your face holding a passport, and verification of a local phone number.
Additionally, there are restrictions on which type of apps can and cannot be published in China. Restricted apps include those politically oriented, containing sexual content and gambling. Also, some categories require special licenses and are checked throughly such as finance and location based apps.
The most recent regulation are specifically related to mobile games where each game app has to go through an approval process that can take a few months. The process takes a minimum of one month and for foreign apps can take three months and needs to comply with the Chinese government requirements.
When I just started AppInChina.co three years ago I had to first make what engineers call a “sanity” check. Does it really make sense to offer such a service? At the time I met a friend who works for a large company also in the mobile space and asked for his advice. He said then that I should work fast as I have about a year until the market consolidates and those 300 Android stores will disappear.
Well, perhaps I’m exaggerating what he said a little, but something that didn’t happen is a major consolidation in the market. Until recently, the only major consolidation event was when three years ago Baidu acquired both “91″ and “HiMarket” for 1.9 billion USD. Then, about 2-3 weeks ago Alibaba acquired Wanduojia. On recent stores ranking Alibaba’s store was ranked #24 with a market share of only 0.25%, so no wonder they decided to buy Wanduojia which currently is #8 (4.07% coverage) and the first store that doesn’t belong to any of the three major groups I mentioned in my previous post which all have no reason to sell their store. Wanduojia is almost the only independent top store.
It’s hard to tell how these consolidations are going to influence the market, but it’s certainly something to watch as the largest companies are now holding almost all top ten stores with the largest market size. It’s getting hot at the top; nobody wants to lose a 700 million user market.
As mentioned before Google Play is blocked in China. But it’s not that only the store itself is blocked, ALL Google services are blocked. How does that influence the mobile market?
Think of all the apps using Google maps, or the ones that have in-app purchases and need to use Google payments or if your app has Google or Facebook login. All these don’t work in China.
Foreigners mainly found ways around this as they are heavy users of these services by using VPNs (or “virtual private network”.) This is a constant, never-ending cat and mouse chase. The Chinese authorities are after the VPN providers constantly trying to block them, while the VPN companies keep developing ways around these blocks. It’s not uncommon to see such a question on a WeChat group: “ABC VPN is not working for me today, for you as well? Which one works for you?”
Chinese users almost never use VPNs, so if you are planning to get to the masses (which you probably are), using blocked services will get you nowhere. So, when building your app for the Chinese market, you are required to integrate Chinese services such as Baidu maps, Alipay or WeChat payment if you want to get into the mass of users.
Bottom line is this: doing business in China is complicated on the mobile sector as well and very competitive but because of its size, it’s a market you can’t ignore. Those influences I mentioned are guidelines for what you need to pay attention to and prepare when entering the market, which I hope makes more sense now.
Image credit by Skinny Casual Lover