Mobile Apps in China - A HUGE Opportunity for Armenia

Smartphones and tablets have gone from being gadgets for relatively affluent people in relatively affluent countries to ubiquitous devices in mainstream use in many countries around the world. In fact in 2013, China surpassed the US to become the country with the largest installed base of connected devices as measured by Flurry Analytics. Flurry estimates that by the end of February 2013, China will have 246 million devices compared to 230 million in the U.S.

The Chinese app market has developed to the point where it is now the the largest in the world, having seen sales grow by 870 percent in 2012. China presents a highly conducive environment for app development, promising an enthusiastic consumer base as well as entrepreneurial designers keen to work for creative start-ups.

For Armenian developers - It is all Mobile Apps in China

With well over 25% of the entire Chinese population accessing the internet with mobile telephones, the demand for apps is clearly very large. According to data collected by Guohe, a Chinese mobile advertising firm, 48 percent of iPhone users and 36 percent of Android users spend two hours or more using apps per day.

There is some willingness to pay for software, although this still lags behind Western users. Only 10 percent of Android users and 32 percent of iPhone users have spent more than US$30 on apps for their devices. Since willingness to pay for apps outright is relatively low in China, many companies opt for alternative revenue sources. One prominent source is “in-app” sales, which require users to pay for additional application functions. On the international aggregate, this seems to be an effective revenue generator.

According to smartphone analyst Distimo, 72 percent of Apple’s App Store revenue comes not from initial app sales, but from in-app purchases. This is partly intuitive: providing an app for free builds loyalty and interest, laying the groundwork for future purchases.

Start by researching the market

Two things stand out when I talk to foreign app developers about China:

  1. They’re very excited about the opportunity;
  2. They know almost nothing about the market.

If they’re so eager, then why is still so hard for them to understand the Chinese market?

First, to investigate a new market, a developer starts by reviewing the top app rankings on Google Play or the iTunes App Store. This works for nearly every market in the world, except for China. While Google Play is dominant in the rest of the world, it’s a small player in China, where Android is the vast majority of the market. The major mobile analytics firms (AppAnnie, Distimo, etc.) rely upon Google Play data, so they don’t really cover China either.

Second, just as in PC Internet, China is very different. If you look at the top apps in China, there’s nary a foreign app to be found. In other countries, there are many more global apps (Facebook, Instagram, WhatsApp, etc.) in those rankings.

But foreign developers still have great opportunities in China. Among top games, foreign developers makeup roughly half. And the distribution channels (app stores), are far more open to foreign developers than the PC Internet was. In the PC era, foreign game developers had to be represented by local Chinese publishers, which handicapped their access to the market (see the debacle between Blizzard & The9). Today, a foreign developer still needs to invest time to understand the market, but the regulatory barriers do not exist as the ones in retail, so there is nothing holding back Armenian tech companies except themselves.

Wandoujia’s App Index Offers a Peek Behind the Curtain at China’s Complex Android Market

China’s mobile landscape can be a pretty baffling place, especially when it comes to Android. While the rest of the world more or less sticks to Google Play, China has dozens of third-party Android platforms, and tracking stats and trends on them can be exceedingly difficult, especially for overseas developers. Thankfully, one of these platforms –– China’s top android app store Wandoujia –– is now helping English-speaking developers peer behind the curtain of China’s complex Android world. The company is now publishing what it calls its China App Index, a report containing everything from the top mobile trends to the most popular and fastest-growing games and apps. You can subscribe to the mailing list for the China App Index here and can check out the first report, for June 2013, below:

Chinese developers are also focused on mobile

Within China itself, Chinese competitors may have an even greater advantage in the app market since cultural influences and differences are likely to be even more important in the app market than in the device market. There are already strong Chinese app companies such as Baidu and Tencent and clusters of app developers emerging in places like Chengdu. At first they are likely to concentrate on apps for the large local market, but that may eventually lead to growing app exports. For example, the fact that Chinese consumers over-index on some more work and educational-oriented apps may encourage Chinese developers to focus on those areas and innovate, and that could lead to creation of apps that end up being adopted elsewhere in the world.