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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
Latin American mobile commerce powerhouse Movile and Just Eat, the global online take-out service, have announced a $50M investment in Brazil’s leading food delivery service, iFood. The raise brings iFood’s total funding to $62M.Leer más
Latin American mobile commerce powerhouse Movile and Just Eat, the global online take-out service, have announced a $50M investment in Brazil’s leading food delivery service, iFood. The raise brings iFood’s total funding to $62M.
Movile and Just Eat are responsible for investing in all but iFood’s original $1.6mm Series A. Movile invested $4.6 million in the company’s B and C rounds, and last year Just Eat funded a $5.7M Series D and merged its Brazil operations with iFood. Movile CEO Fabricio Bloisi and CFO Arthur O’Keefe sit on the board with Jerome Gavin from Just Eat and Dan Faccio from Naspers, which owns a majority stake in Movile.
Movile, which has a 60% controlling stake of iFood, bills itself as the largest mobile commerce platform in Latin America by a number of indices: Gross Merchandise Value through mobile, net revenues, profits and market share. They’ve seen 80% growth year over year since 2008. Their portfolio of B2B and B2C companies includes some they have invested in, like iFood, Apontador, the “Brazilian Yelp,” and MapLink, the “Brazilian Waze”; or baked from scratch, like Playkids, the number one grossing app worldwide for kids. The company has six co-founders, and Fabricio Bloisi serves as CEO.
British food delivery giant Just Eat is a global player in online takeout ordering, and owns a 30% stake in iFood. Jesper Buch founded Just Eat in Denmark in 2001, and boostrapped its way to a Series A by Index Ventures in 2009. Greylock and Redpoint Ventures invested in 2011, and the company went public in 2014.
“At the time of the IPO,” a spokesperson for Just Eat says, “we estimated the Brazilian online takeaway food market to be worth at least £1bn annually [$1.5 billion] and potentially multiples of this, making Brazil the most attractive market in our industry in Latin America. While we had built a great position in Brazil over the years as the second biggest player, RestauranteWeb, the network effects that come from being a clear leader are significantly better. The merger with iFood to form our Joint Venture was a pragmatic move.”
“We made all sorts of errors in the beginning, but by the start of 2013 we had a good team in place, we were gaining some market penetration, and were very strong on mobile, which we believed in strongly.”
— Felipe Fioravante
iFood’s genesis pre-dates both of its investors. An engineer named Patrick Sigrist started a food delivery company called Disk Cook in 1997. iFood’s current CEO Felipe Fioravante quit a consulting job in 2009 to join the company with some of his friends. “If we met certain metrics, we’d get some equity in the company,” Fioravante explains on a call from São Paulo. “It was a really informal agreement.”
The idea of creating a modernized take on Disk Cook, a search directory for take-out in your neighborhood, was put on the back burner until 2011. “We realized we were already behind the market, there were already competitors, and we were losing the market that should be hours,” Fioravante says. iFood launched that same year as a spin-out from Disk Cook, and by 2012 they raised a $1.6M Series A from São Paulo-based Warehouse Investimentos, which lasted till 2013.
“We made all sorts of errors in the beginning, but by the start of 2013 we had a good team in place, we were gaining some market penetration, and were very strong on mobile, which we believed in strongly,” Fioravante says. Then Movile invested the Series B, and iFood’s growth curve took a dramatic turn upwards. “When Movile entered the deal we were doing 30,00 orders per month, and we ended the year with 110,000 per month.” Then, last year, iFood bought out Disk Cook.
“In these last three years we’ve seen amazing growth,” says Fioravante. “iFood is now #1 in Latin America, with more than 80% market share in Brazil, and amazing performance on mobile.”
That puts them in an envious leading position between two massively quickly growing industries: mobile and ecommerce. Brazil is the world’s fifth largest mobile market, with 283mm mobile phone lines, or 1.39 per person, and is growing faster than anywhere else in the world, according to data from IDC Worldwide. Brazil also has the the fifth largest smartphone market in the world. And Brazilians are significantly more tethered to their devices than their American counterparts.
Meanwhile, e-commerce is growing faster in Latin America than anywhere in the world, besides China, and Brazil is leading the charge with 21% year over year growth. Add the fact that 20% of all e-commerce purchases in Brazil originate on mobile and you’ve got a hot market opportunity.
Riding the amplitude of these massive waves, iFood says 75% of their orders, and nine out of ten new users, are coming from mobile. “I think it’s one of the highest rates in the world, at least of the food delivery companies we’ve heard about,” says Fioravante. (By comparison, GrubHub says that over half their orders come from mobile; Eat24 is just under 50%.) “People know us as an app they can use to order food,” says Fioravante, “and that makes the entire difference. Especially in Brazil, most people are buying cell phones before having computers, if they have one at all. Web is important, but the future is mobile.”
With the launch of the world’s most expensive iPhone in Brazil a few years ago, smartphones started off as a status symbol, accessible only to the nation’s wealthiest segment, or “A” class. But with Android phones entering the market at significantly cheaper prices, access is spreading. “There are over 60 million smartphones in Brazil,” reasons Fioravante. “It’s a lot bigger already than our “A” and “B” [upper] classes combined. We’re limited today by smartphones and who has them, but our vision is to make this app for everyone.”
While Brazil has traffic and transportation infrastructure hurdles that make timely delivery a logistical challenge, Brazil also has a strong culture of same-day delivery already in place. In Rio, I’ve had everything from prescription drugs to a 50-kilo bag of dog food delivered for free or nearly free by delivery men on street bikes. Similarly, iFood relies on a fleet of 900 moto-bike drivers through a partnership with Movile’s app, Rapiddo, to deliver their orders. “I was in the US this month and saw that the culture of delivery isn’t as big as here in Brazil,” says Fioravante.
iFood closed 2014 with over 500,000 delivery requests per month, capturing 80% of the online restaurant delivery market. With 10-12% growth month over month, they expect to hit one million deliveries per month by the end of the year.
“If iFood were local to the US would be second only to GrubHub,” adds Movile’s Bloisi. “Across the world, we would be second only to Just Eat in the UK, Delivery Hero in Germany and Turkey, and local players in South Korea and Japan. At the same time, we are growing two to six times faster than them — they grew at 50-100% in 2014, and we grew 350%.”
But it’s a digital drop in a very big analog market. Fioravante estimates iFood is capturing less than 4% of the potential volume, and food delivery doesn’t even rank on the list of Brazil’s top 10 ecommerce categories. “Most people don’t know they can order online. But we’re confident Brazil is one of the biggest markets in terms of growth.”
Moreover, $50 million is a drop in the bucket compared to the estimated $1.28 billion that has been invested this year in delivery companies worldwide, according to data from CrunchBase. Fioravante says the capital infusion will go towards closing the online ordering gap and communicating the service better with marketing investment; growing quickly in cities they don’t have a presence; and building out the team and technology.Cerrar
The on-demand delivery market has now raised more money in the first four months of 2015 than it did in all of 2014, and the latest beneficiary is the Brazilian mobile application and content developer Movile.Leer más
The company has received a $40 million commitment from the South African technology investor and media company, Naspers (whose other investments include global technology giants like China’s Tencent, India’s Flipkart, Russia’s Mail.ru, and Latin America’s OLX).
Movile’s latest $40 million financing, which brings the company’s total commitments to nearly $100 million, is just about keeping pace with its competitors globally. A ridiculous amount of money has been invested into delivery companies of all stripes this year, with totals reaching $1.28 billion so far this year, according to data from CrunchBase.
Technology companies like Rocket Internet (Germany’s “startup factory”) have made some of the biggest bets, but venture capital firms have also been taking big swings on the delivery space. Investments in companies like Instacart, which raised $210 million at the end of last year, and Postmates, which just raised $35 million in financing, show that investors think this is an industry that can deliver returns.
“We believe this is a billion dollar opportunity,” says Fabricio Bloisi, Movile’s chief executive. “Everyone will start to use the mobile phone to supply what they want within 30 minutes to an hour.”
In addition to all of the venture money pouring in, Bloisi points to the delivery services launched by the largest technology companies like Alibaba, Amazon, and Google.
Over the past several years, Movile, which still operates a successful content distribution business (mainly educational and entertainment apps and content for children), has made ten acquisitions to bolt on delivery services. Bloisi and his investors see the trend of online-to-offline commerce as the future of the business.
“Movile is focused on local commerce and content,” he says. “We raised this round from Naspers and we expect to double our investments in [online-to-offline services].”
Currently Movile offers food and ticket delivery services, through its iFood and Cinepapaya subsidiaries, as well as delivery logistics and online reviews through a suite of acquisitions made over the last two years. And in some ways, its expansion mirrors that of its German rival, Rocket Internet.
“We want to expand from cinema to other verticals and we want to go to Latin America,” says Bloisi. “The big thing for us is we see the synergy of local commerce. once we sell the user food we can also sell tickets or they can also buy grocery delivery. We have 65% of sales on food through mobile.
And, while the focus now is on consolidating in Brazil and moving into the rest of Latin America, Movile definitely sees their strategy in global terms.
“Probably you saw we have a food war running in the world,” says Bloisi. “There are other players including German players who are trying to beat us in the world.”
While these big competitors indubitably create obstacles in certain markets, it’s a big world, and Movile’s investors think there are still pockets of opportunity.
It is a global opportunity and we look very carefully at where we go. When we look at these opportunities we look to see what is worth buying and what is worth growing internally,” says Veronica Serra, a partner with Innova Capital. “In general you look at size and scale and what’s least penetrated in the market. It’s a touchy subject where we’re looking because we don’t want to call attention to where we looked at because of competition.Cerrar
China’s mobile market is notoriously difficult to penetrate. Case in point: right now, nine of the country’s top ten highest-grossing iPhone apps come from Chinese developers. But in February, an app from Brazilian developer Movile called PlayKids managed to crack the top 5 grossing list in the “kids” category. How did a foreign entertainment and education app start raking in downloads and cash in the Middle Kingdom? I spoke with PlayKids head of global expansion Eduardo Henrique to find out.Leer más
First and foremost is licensing local content. Henrique called this “the most important adaptation.” “All content that you see on PlayKids is different country by country,” he said, “because we bring in local content to adapt the platform for the local market.” That might seem obvious, but which content will appeal to Chinese kids isn’t always clear, and it’s easy to fall into the trap of offering only foreign content and marketing the app as one of the billion other “English learning” educational apps out there.
To find the right content, PlayKids did its research and came across Chinese content provider Beva. Beva was perfect for PlayKids, Henrique says. “Their content is very focused on kids under five, [which] is our target,” he told me, “and they’re a huge success in China.” Beva’s 20-billion-plus views across China’s streaming platforms convinced PlayKids that they were the right content provider to partner with, so the company licensed a lot of Beva’s content. The result, as PlayKids’s app rankings bear out, have been very well received.
Wholesale translation into the local language is another important step, according to Henrique, and that doesn’t necessarily mean going word-for-word. All of the app’s spoken audio was re-recorded in Chinese; no corners were cut. But PlayKids also came up with a Chinese-language description and screenshots for the Chinese app store, and these marketing materials aren’t just translations of the English app store content. “The [Chinese] description is totally different,” Henrique said, because it places more emphasis on the importance of educational entertainment and the educational activities in the app. That’s hugely important, he said, because the app description and screenshots on the app store are usually the first thing your users see. PlayKids hired local experts and did focus groups to figure out what sort of marketing appealed most to Chinese parents.
PlayKids has also partnered with local ad networks including Tencent’s and Baidu’s, and Henrique said the app is also moving into Chinese social media. “In the West we use Facebook a lot, but we don’t have Facebook in China so we have to adapt the marketing to the local players.” That’s why PlayKids is setting up a WeChat account that will begin operation sometime this month.
Another key to success: adapt to the local culture! PlayKids is a Netflix-like app that allows kids to watch episodes of various education kids shows, Henrique told me. But because young children can’t read, the app is navigated visually with a cute train: each boxcar attached to the train can be tapped to open up a show or educational game. But in honor of Chinese new year, PlayKids gave the app an (optional) visual overhaul for Chinese new year, complete with traditional colors, lions, dragons, lanterns, and fireworks. That may seem like a simple thing, but for children—who are often drawn to and comforted by the familiar—it’s a big deal.
I asked Henrique what he would recommend other app developers interested in China do if they want to enter the market. “My advice first is to understand the local differences,” he said. “So hire a Chinese country manager that will help you to plan how to localize the product. That’s mandatory.”
“The other advice is that you have to move fast,” Henrique continued. “In China, competitors are extremely agile […] You have to adapt fast and innovate fast because your competitors will copy you, and if they are more adapted to the local market you will lose the competition. So launch, iterate fast, launch new versions, listen to your users, and innovate fast.”Cerrar
If you are a game developer interested in rolling out your product in China, it’s worth heeding the lessons learned by PlayKids. The team behind the world’s top grossing iOS children’s app introduced their product in China three months ago and they clearly did a lot of things right and one important thing wrong.Leer más
PlayKids, which was created by the Latin American mobile platform provider Movile and is the top grossing kids app in over 20 countries, was launched in China last December and achieved over 300,000 downloads in the first month. This was significant because it led Supercell’s mammoth hit game – Clash of Clans – by 100,000 downloads over the same period.
Eduardo Henrique, PlayKids’ Head of Global Expansion, spoke for this column about the challenges of launching his popular children’s app in the huge Chinese market. “The launch has clearly been a success,” said Henrique. “It’s a learning curve, but I am very optimistic. It’s super difficult to succeed in the app market anywhere in the world.”
One of the challenges that Henrique and his PlayKids team faced when launching in China was the need to understand the local culture. “So we hired a Chinese country manager who was locally raised,” Henrique explained. “She’s driving our marketing.”
Another key decision which Movile had to make was the platform on which they would launch their popular app. PlayKids was launched only on iOS which is not the usual way app developers roll out their new versions.
However, Movile already had a reliable billing platform with Apple and the company felt that following a simpler route would let them move faster in a tough market.
An important factor may well have been the presence of over 100 million iOS devices in China. Henrique is targeting this large user base for his advertising, but he first had to narrow the outreach for marketing. So by focusing only on users in China’s large cities (such as Beijing), and more specifically women between the age of 25 and 40 years old, PlayKids hopes to generate an even more successful response.
“Women in this age group are mainly in charge of their children’s education so they choose the apps,” Henrique explained.
There was another hurdle to overcome in the launch of PlayKids when it came to advertising: no Facebook. The world’s most visible and influential social media platform has been banned in China since 2009, so Henrique had to find ad networks with local ties to reach potential customers.
Another important factor was speed. Immediately after launching in December, PlayKids immediately revised its Chinese version. According to Henrique, this was partly to keep interest high and capitalize on the upcoming Chinese New Year. But there was another, perhaps even more important element that faces all app developers: imitation.
“Chinese companies are extremely efficient in copying you and improving on what you did,” said Henrique. “My challenge was to move faster than my local competitors.”
The Movile executive is realistic about the challenge of competing in the difficult Chinese market. Despite PlayKids’ impressive early success, not everything went smoothly for its introduction.
The Chinese government requires that you must have a legal entity inside the country if you are going to use local host servers. Movile did not, so they had to use a service outside the country which meant crossing stringent protection controls more commonly known as “The Great Firewall.”
“Performance was excellent, but downloads were a problem,” said Henrique.
As a result, he is opening a subsidiary company in China that will allow PlayKids to run from service inside the country.
Movile is planning to deliver more new content including cartoons later this month. “Instead of complaining, I just have to move faster,” said Henrique. “We want to offer more.”
The launch of PlayKids in China is a cautionary tale about understanding the local culture and then taking the necessary steps to ensure success. Game developers can expect to face challenges when it comes to advertising and server location, and they must prepare to be copied almost immediately. It’s an undertaking not for the faint of heart, but then you wouldn’t expect that entry into the world’s largest market to be easy.Cerrar
Mobile apps can expand at lightening speed. But if your app is targeting kids, there’s an extra step involved: Winning over the parent first.Leer más
PlayKids, a wildely popular app designed for toddlers, shows how an app can still be built into a global platform despite significant growing pains.
The parent company, Movile Internet Movel, first created the app in Brazil in 2013 as a TV subscription that allowed children to watch their favorite shows anywhere they go – over 200 videos, with new episodes added weekly.
Six months later, the app expanded into the U.S. market, and since then it’s rolled out to 27 countries in six languages. Its content targets children under five. It offers a free version, but a monthly subscription of $8.99.
The app reached more than 6 million downloads within a year of launching, and has more than 3 million monthly active users.
PlayKids prioritized its markets by targeting those with high penetration of smartphones and tablets. Makes perfect sense for a product aimed at parents who want to expose their children to high-quality content on mobile devices.
Significant cultural differences, however caught the company off guard, said Eduardo Enrique, the company’s head of global expansion. This impacted both content and marketing in dramatic ways.
“Creating a global content portfolio is a nightmare — I have no words to tell you what it’s like!” Henrique laughs. “What’s good for parents in the U.S. is not necessarily good in terms of content for Mexico and not necessarily good for parents in China. So we had to learn to respect the local cultural factors, country by country.”
In the case of Germany, simply getting the market comfortable with the concept was a challenge. In Germany, parents will avoid exposing children to cellphones and tablets “with all their might,” Henrique explained. “They hate it — and it made it super difficult to penetrate. So it wasn’t just about translating ads; we had to convince German parents PlayKids wasn’t a bad thing, but a good thing.”
Billing is also different from country to country. Credit card penetration is one thing in the U.S. It’s another in Brazil, and different in Mexico where it’s a pre-paid gift card market.
Converting users from using the free version to the paid version can be difficult as well. Conversion rates vary between countries. PlayKids is based on a subscription model, providing the app install for free along with a limited selection of the content consisting of books, videos, television series, educational games, and even lullabies. To unlock all the content, users are encouraged to pay for a $8.99/month subscription fee (all educational games are accessible for free.)
Henrique wouldn’t specify the conversion rate for the U.S. It ranges from two percent to 11 percent depending on the country, he said.
He was, however, very forthcoming that Apple’s iOS generated more revenue for the company than Google’s Android. “Apple is very focused on high-end devices, and my theory is that those who own those devices are willing to spend more money.”
That’s born out by recent App Annie’s annual report, which claims the App Store generated more than 70% more revenues than Google Play in 2014.
Henrique also points to Apple’s mature billing system. “It’s more efficient,” he says. In most countries, Apple forces the user to attach a credit card to their account, so it’s almost impossible to use an iPhone without a valid credit card, he says.
So while Android produces many more downloads, PlayKids has prioritized Apple from a marketing perspective. At the same time, Henrique will not invest marketing dollars with any channel that cannot segment against his niche audience. “You can tell me you have a mobile install platform that has a billion impressions per day, but if it can’t target parents with kids under five, I don’t care.”
One of PlayKids’ biggest marketing challenges is the regulations around collecting data on children. Because of COPPA — the Children’s Online Privacy Protection Act — PlayKids doesn’t collect any data on its users, the kind of personalized data that is essential for engaging and re-engaging users.
“This is one of my main problems today. It’s a super delicate process and we are working exactly on this now in partnership with an expert in COPPA law.” To help ease the path for this, PlayKids is investing in developing entirely new content aimed at parents themselves. “In this way, we’ll have a dialogue with parents to provide information, understand their needs, offer them a service, and improve our products. It’s one of our main priorities in 2015.”
Eduardo Enrique, Head of Global Expansion for Playkids’, will be joining other senior execs at Mobile Summit and participating in one of the fireside sessions focusing on mobile targeting strategies. More details on the sessions at Mobile Summit and be found on the event’s agenda page. Space is extremely limited — we’ve only got seats for a total of 180 executives — but it’s not too late to apply for one of the remaining seats.Cerrar
Movile, the largest mobile services and software developer in Latin America, has been quietly raising significant investment and acquiring new businesses over the past year. And as the Brazilian technology conglomerate extends their reach into new global markets such as China and the U.S., the activity of major industry players such as Apple, Facebook, and Google in Latin America is drawing a renewed focus on that region of the world.Leer más
With 30 million monthly users who account for 50 billion transactions a year on the company’s platform, Movile has built a significant customer base through its games, education, and entertainment apps. These include Apontador (their version of Yelp), Cinepapaya (mobile ticketing), and iFood (similar to GrubHub).
But the big seller for Movile has been PlayKids which has emerged as the number two most popular app in Brazil (behind “Clash of Clans” and ahead of “Candy Crush”). “Brazil entrepreneurs need to think big,” said Movile’s co-founder Eduardo Henrique during a press reception in San Francisco last night. “And we are here to play big.”
The company recently launched PlayKids in China and it has become the most popular paid app for children in the App Store with an eye-catching 90 percent retention rate.
Founded in 1998, the company built its business by supplying applications for feature phones, low-end mobile handsets with very limited capabilities. As smartphones became more widely used throughout developing counties in Latin America, Movile’s own fortunes rose as well.
“We’re one of the few companies in the world to successfully make the shift from feature phones to smartphones,” said Clauber Scarparo, Movile’s marketing executive.
Movile’s success in growing their business in the Latin America market from its start 17 years ago has not escaped the attention of technology heavyweights. An example of this interest can be found as recently as this Wednesday when Facebook CEO Mark Zuckerberg held his first-ever “town hall meeting” with the social media giant’s user community outside of the United States. The location he chose was Bogota, Columbia.
Google is another company very much in the news where Latin America is concerned. The search powerhouse announced this week that their Project Ara, a modular smartphone which lets the owner swap in additional batteries or cameras, will be first introduced in Puerto Rico.
And Apple revealed this week that they would bring iAds to Brazil and Mexico in that product’s first expansion outside of the U.S. The introduction of Apple’s iAds advertising platform into Latin America follows the company’s entry into the Brazilian retail market last year with the opening of its first store in Rio de Janeiro.
The conventional wisdom in the technology world has been that companies seeking to expand their business outside of the U.S. should proceed to China and India as next steps. Now Brazil has entered the conversation as well.
“We think that the Latin America market is huge,” said Zain Jaffer, CEO of the San Francisco-based Vungle. His company is an early leader in the growing field of in-app video advertising which plays 15-second high definition promotional spots, and Jaffer says they are targeting Brazil along with China and India for future growth.
In addition to its headquarters in Brazil, Movile has established a presence in the U.S. tech community by opening an office in Sunnyvale, California. “Latin American entrepreneurs can go global,” said Henrique. “But they need to shake hands with Silicon Valley.”
Based on the success of PlayKids and Movile’s expanding roster of popular apps, it’s quite likely that companies in Silicon Valley will be more than eager to shake hands with Latin American entrepreneurs as well.Cerrar
PlayKids, the video subscription service that focuses on kids under five, launched the iOS version of its app in China Thursday. PlayKids wants to win over Chinese consumers with local kids titles like Mumu Tribe, Our Friend Xiong Xiaomi and Dinobob.Leer más
PlayKids head of international expansion Eduardo Henrique told me during a recent interview that the company decided to focus on iOS in part because the Chinese Android market is more fragmented, but also because that’s where the company has seen more traction across its other 26 markets. “Most of our revenues are from the iOS platform,” he said.
PlayKids has seen more than eight million downloads of its app, and PlayKids users have played more than 500 million videos through the app. The service is owned and operated by Latin America’s mobile app specialist Movile. Henrique told me the company focused entirely on international expansion in 2014, but it may add a version for kids over five in 2015.Cerrar
Brazilian internet conglomerate Movile is pushing deeper into consumer investments in Latin America through a $2 million investment in mobile movie ticketing company, CinePapaya.Leer más
The company says it will use the funds to enter new markets, hire new staff, and increase product innovation as part of the Movile network of companies.
The Peruvian-based company has expanded to Chile, Colombia, Mexico, Miami, Argentina, Brazil, Costa Rica, Venezuela and Ecuador and works with theaters like Cinemark.
The company’s services include searching and buying tickets, with additional features that allow users to find films based on their personal availability.
CinePapaya is working with Chilevision and ATV, and its app is available on iOS, Android, and Windows Phones.
According to a recent survey, global box office revenues from 2013 increased by four percent from the previous year, creating an industry worth $35.9 billion. The Latin American box office saw sales increase seven percent, centered around Mexico which rose sixteen percent, and Argentina, which rose eight percent. The numbers, provided by Movile, show a market that’s ripe for new players.
“We’re building a comprehensive suite of apps that will encompass key consumer verticals.” said Fabricio Bloisi, Movile’s founder and chief executive. “It’s exciting to be building the next generation of apps that will define how millions of Latin Americans get the goods and services they want through their phone.”
Overall, Movile’s smartphone and tablet applications for content and commerce along with its push into online-to-offline commerce have meant an expanding headcount. The company now employs 400 staffers and connects to 40 carriers with 700 million subscribers. The company’s been backed by the South African tech company, Naspers, since 2008.Cerrar