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.Leer más
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.
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.
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.
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.
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.
Marketing should also entail establishing a presence on Chinese social networks and messaging apps, including QQ, WeChat 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.
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.
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.
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?Cerrar
You might think that YouTube has the kid video demographic locked down, particularly since it launched a dedicated video app for kids, but a company out of Brazil is aiming to challenge that asumption. And it’s putting another $15 million where it’s mouth is, too.Leer más
You might think that YouTube has the kid video demographic locked down, particularly since it launched a dedicated video app for kids, but a company out of Brazil is aiming to challenge that asumption. And it’s putting another $15 million where it’s mouth is, too.
That company is Movile, a mobile app development firm responsible for a range of different services including Playkids, its video-meets-education app for young kids. Playkids, which was first launched two years ago, is getting the cash boost to develop new business ideas and features over the next nine to 12 months. (The money itself comes courtesy of Movile’s recent $40 million raise from Naspers.)
The $15 million matches the total of previous investments made by Sao Paulo-headquartered Movile, which acts as incubator to a range of different projects. The organization put $5 million into Playkids in March 2014, before adding a further $10 million later that August.
Movile — which operates a range of Latam-based services include iFood (food delivery), Superplayer (music streaming), and Rapiddo (a Fandago rival) — is putting serious focus on Playkids after the service made a breakthrough in numerous international markets over the past year. Playkids is global, but its premium content is available on iOS and Android in 27 countries worldwide. Movile said the service has clocked over one billion episodes played (in six languages) and it has been particularly successful in China and the U.S., where it has been the top ranked kids app (per App Annie data). It is also the overall top grossing children’s app in the world.
Initially billed as a video/TV app for kids, it has evolved beyond that to cover a range of different entertainment formats, including books, puzzles, games and audio. That varied array of content is how the service makes its money, basic features are available for free, with other — premium content — requiring users to pay for subscription-based access.
It isn’t just content for kids where Movile has develop Playkids, it has also branched out to offer new features designed for parents. That includes more obvious things like watch time limits and selecting specific videos, and interesting features such as messaging and a parental dashboard. The dashboard, as you’d think, gives parents an overview of their kids’ activities, while the messaging feature — called Rocket — lets them send short messages such as ‘brush your teeth’ or ‘tidy your room’ reminders via the service. Kids can respond with videos.
Rocket Messaging is initially available for the Apple Watch app only, but Eduardo Henrique — head of global expansion at PlayKids — told TechCrunch in an interview that the company will expand the feature into accompanying apps for regular iOS devices.
“We want to be a hub of educational entertainment,” Henrique said. “The idea of a passive experience where kids just watch videos is not exploring the technology can we can offer today. Kids can interact with the screen, play educational content, read music, and more.”
“This is first version of many things that we can create to bring parents to the platform. Our intention is to invest more in information for parents and tools for parents and kids,” the Brazilian added.
I test it with my two kids — aged four and six — and, to my surprise, Playkids was as popular as the (few) games which I let them play. The content is designed up kids up to the age of about four or five, and that showed as my youngest was most engaged while the elder found it all a little too easy.
Playkids expanded into China and most recently Japan in recent months. Henrique explained that these launches were its last for this year, and that now the team is focused on developing the technology and services to push the service on in its existing markets.
“Our challenge is to become largest platform for kids in the world,” he said. That goal could see Playkids become an independent business in its own right.
“We treat Playkids like a small company inside Movile — it has its own team but is also supported by Movile,” he added. “But we are thinking about spinning it out — maybe it will happen one day.”Cerrar
Brazil, which has seen incredible economic growth in the last decade, is a bit of a mobile contradiction—and that’s a huge opportunity for Google. On one hand, more people than ever have smartphones. On the other hand, Brazilians and Latin Americans aren’t culturally accustomed to making credit card purchases—especially on mobile devices. This means there’s a huge financial opportunity for Google to power mobile payments in the country and give users an easy way to pay for both virtual and physical goods on their smartphones. By making carrier billing a reality in Latin America, Google could bring mobile content to millions of new users and help advance the smartphone revolution—all while cashing in big time.Leer más
Android’s openness has been a boon for device manufacturers as well as app developers and distributors all over the globe. The freedom to build easily and quickly for Android, primarily for low-cost smartphones, has allowed the platform to grow exponentially in regions like Asia. In China, Android devices made up 70 percent of all smart devices by late 2012, and Android is expected to continue growing over iOS in the region. It’s common for independent players to build their own app stores, where they have control over approvals and can implement their own monetization strategies, including carrier billing. For example, 91 Wireless is one of China’s biggest third-party distribution platforms, with over 10 billion apps downloaded to date. This isn’t necessarily the case in Brazil, where mobile payments aren’t as widely accepted yet.
The key for independent platforms to gain—and monetize—users is usually to implement some sort of carrier billing. Independent carrier billing lets developers distribute their apps efficiently and en masse through users’ phone plans of choice. Then, rather than paying for in-app purchases or services on a case-by-case basis, users can be charged all at once through their telecom providers, along with their regular phone bills. These partnerships between app distribution platforms and telecom carriers mean that apps can come pre-packaged on phones, therefore reaching more users in the first place.
More than a year ago, Google announced plans to bring Google Play and a variety of digital content, primarily books and music, to Brazil — and make carrier billing a widespread way for Brazilian mobile users to access this new content. Even though Google has rolled out carrier billing in a number of other foreign markets like Australia, Germany, Japan, Spain and the UK, it still hasn’t made the jump into Brazil or any part of Latin America. Right now, the majority of mobile users in Brazil — 79 percent –choose prepaid phone plans. While partnering with Google for carrier billing could initially cause a decrease in margins for carriers since mobile payments is still a growing area, I believe it would ultimately lead to a huge increase in the number of new transactions, and therefore boost overall revenue for the mobile market.
According to a recent study by Juniper Research, allowing carrier billing tends to lead to not only more transactions, but purchases of higher values as well. Implementing carrier billing also lets app stores reach a more diverse mobile audience, like those users that don’t have credit cards, by letting them choose a payment method they’re comfortable with. According to the Brazilian Association of Credit Card Companies, fewer than 50 percent of the 193 million Brazilians have a credit card. In sharp contrast, Brazil has 265 million mobile lines.
In addition to Brazil, this factor is also highly relevant to other Latin American countries. The credit card market is growing in the region, but not as rapidly as smartphone adoption. Even those who do have credit cards typically won’t use them to make virtual purchases — they’re just not culturally accustomed to that method of making payments, since the region was feature phone-only not too long ago. We’ve noticed this trend in Movile’s own users as well. We partner with and distribute games for over 50 game developers that all offer carrier billing as a payment method for purchasing virtual goods. Our largest game developer partner has seen that over 65 percent of transactions are made via carrier billing through our telecom partners, while 35 percent come from a variety of other payment methods. This is a pretty accurate depiction of the overall preferences in the region.
Not only are there more affordable smartphones entering the market in Latin America, but mobile Internet access is also going down in cost and becoming accessible in more and more locations that were once considered too remote. According to a recent GSMA study, the most affordable mobile data plans for smartphones in Latin America have dropped a staggering 52 percent in monthly costs over the last three years. And for many in the region, mobile devices are the first exposure they’ll have to the Internet at all, as computers have long been too expensive. The study predicts that this greater affordability will allow the 149 million people in Latin America’s lowest income bracket to access the mobile web for the first time.
Carrier billing is truly the best chance of reaching this expanding mobile user base and its newfound purchasing power. Apple has neither the open platform to allow for widespread carrier billing, nor the reach of thousands of different Android devices being built by independent manufacturers. Google has this unique opportunity to partner with carriers and offer millions of users mobile content via carrier billing, as low-end Android devices that support prepackaged content become the smartphones of choice throughout Latin America.
Eduardo Henrique is a co-founder of Movile, and currently leads the company’s U.S. operations.Cerrar