Marketing your App in china

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    07-Jul-2015

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<ul><li> 1. App Marketing Networks 2014Marketing yourapp in ChinaComplex and fragmented, Chinas app store landscapepresents some real challenges when it comes to apppromotion. But the opportunity could be incredible...An inside guide, from the experts atInsiderguide</li></ul><p> 2. Marketing your app in ChinaIntroductionMuch has been said on the vast opportunities of Chinas burgeoning app economy. China is a huge driver ofgrowth when it comes to worldwide smartphone adoption and, despite low penetration overall, it alreadyboasts the largest smartphone subscriber base in the world. So its not hard to see why, on the surface, theChinese market makes a huge amount of sense for developers looking to expand their business and for newerdevelopers looking for a cheaper route toward app store success compared to Europe and the US.China also isnt necessarily a story of quantity over quality. Unlike some other emerging markets such as LatinAmerica and India, theres enough evidence that a large number of Chinese users willing to spend money on in-apppurchases, and have an appetite for downloading apps that outstrips users in many Western territories.But of course, when it comes to app promotion in China its definitely not all roses (or should we say Lotusflowers?). Chinas app store landscape is incredibly fragmented and complex, localisation is a huge issue, anddeveloper revenue can easily end-up siphoned off to channel partners, app stores, and the Chinese government.This creates a big barrier to entry, especially for smaller and mid-sized developers.So with the iPhones recent launch on China Mobile - the worlds biggest mobile operator we thought its agood time to take an in-depth look at Chinas app market, discussing the opportunities and pitfalls it presentsto developers. Well kick off with a brief look at overall size and growth prospects of the smartphone marketin China, before going in-depth into the value of Chinese users, the potential cost of CPI campaigns and muchmore.Installed base, shipmentsand growthForecasted growth of smartphone installed base in China Soko Media - Learn more at www.mobyaffiliates.com2..Source: Portio Research 3. Marketing your app in ChinaAs you probably already know, China has experienced a huge growth in smartphone users over the past fewyears, and despite a quarterly hiccup late last year - its still growing. Above you can see data Portio Researchshared with us on the growth of Chinas total smartphone installed base between 2011 and 2016. According toPortio, China will account for over 40% of the Asia Pacific markets installed base from 2013 onwards. Soko Media - Learn more at www.mobyaffiliates.com3Estimated smartphone shipments for 2013Source: IDCSmartphone shipments stood at an estimated 360 million in 2013 according to IDC and are forecast to growto 450 million in 2014. Above you can see a breakdown of 2013 total shipments by region, according to IDCestimates (weve added the China-specific forecast from here), which shows China storming ahead of all otherregions by some margin.Total 3G subscribers worldwide Q2 2013Source: Informa 4. Marketing your app in ChinaTo get an impression of how big Chinas market is compared to other regions, take a look at the above chart,which shows total 3G subscribers by region as of Q2 2013, according to Informa. You can see just how massivethe Chinese mobile market really is, with over 325.5 million 3G subs, and penetration standing at just 24.5%overall. Compare that with penetration in territories such as the US (70%) and the UK (72%) and you cansee just how much room there is for the Chinese market to grow. According to NPD DisplaySearch China isexpected to account for 30% of the total smartphone market by 2017.The mobile OS marketshare landscapeMobile OS market share in China (Q3 2012) Soko Media - Learn more at www.mobyaffiliates.com4Source: KantarWhen it comes to mobile OS market share China is now heavily dominated by Android. According to Kantarsdata, and illustrated in the chart above, Android represented 66% of the mobile market in Q3 2012.Mobile OS market share in China (Q3 2013)Source: Kantar 5. Marketing your app in China Soko Media - Learn more at www.mobyaffiliates.com5But fast forward 12 months and Androids share grew by a massive 14%, reaching 81% in Q3 2013, as lowerpriced Android devices began penetrating the market.According to a study from Baidu (Q4 2013) China currently has over 270 million Android users, making it thebiggest Android market globally. However, its worth noting that 70% of those Android devices are so calledAOSP (Android Open Source Platform), which means they do not run Google services and are not hooked-upto the Google Play store (more on this below). But iPhone developers need not be discouraged, theres a lot ofpeople in China, and despite Androids dominance ad network Umeng (2013) says iOS has an 85-million stronginstalled base in the country (Umeng pegs Androids user base at 160 million).App user value in ChinaWhen people think of emerging markets in Asia, Africa and Latin America they usually think of low value users.While this attitude bears true in some respects when it comes to China, it doesnt paint a comprehensivepicture of the countrys app market.Number of installed paid apps (Q1 2013)Source: GoogleHowever, everyone we talked to agreed that China lags behind other territories when it comes to paid apps.The reason why is an open question, but might involve the large number of AOSP handsets and crackediOS devices, which led to a proliferation of pirated apps early on in the app eco-systems emergence. Theabove chart is based on survey data from Google and shows the number of paid apps across all smartphones.Googles survey is from Q1 2013, so the market for paid apps may have picked up since then, but regardless, itdemonstrates that China seriously lags behind mature markets when it comes to paid app purchases and alsofalls behind other emerging markets such as Latin America.Apples further expansion into China, following the China Mobile deal, may see more Chinese users swayed bythe App Stores emphasis on paid applications. However, theres a good chance Chinas aversion to paid apps isdeep set. According to research from InMobi only 37% of Chinese users say price is a factor when downloadingan app (compared to 67% of US users). This may sound like good news (Chinese users dont care about price!) 6. Marketing your app in Chinabut, as InMobi points out, its more likely a reflection of how most Chinese users have a freemium-or-nothingattitude when it comes to apps. Soko Media - Learn more at www.mobyaffiliates.com6Top 10 countries by app revenueSource: DistimoWhile Chinese users are less likely to pay for apps, they do spend money on in-app purchases, with 90% of allapp revenue in China coming from within the app. The above chart from Distimo shows global rankings for totalapp revenue in 2013. Although Distimo doesnt reveal actual numbers, as you can see China comes fifth, justbehind the United Kingdom. Not bad, but it paints a slightly lacklustre picture when you consider the size ofChinas smartphone market.However, Distimos data for China (and China alone) only takes into account iOS revenue not Androidrevenue. Chinas iOS install base is thought to be around 85 million according to Chinese ad network Umeng,which also says a sizeable 30% of Chinese iOS users jailbreak their phones, meaning any revenue data for thosehandsets is unlikely to be captured by Distimos revenue rankings.Take away that 30% and were left with roughly 60 million iOS users in China, an install base thats pushingChina into fifth place globally in total app revenue rankings. For an emerging market thats pretty good going,especially when you consider that Brazil has an estimated 55 million smartphone users and hasnt even crackedDistimos top ten.When it comes to app revenue growth over 2013, China grew significantly compared to mature markets.Distimos data above shows 280% growth in app revenue over the year, compared to 89% and 81% growthin UK and US respectively. Again, bear in mind this is only based on iOS revenue, not Android, where most ofthe install base growth has occurred over the last year. Quite why South Korea which only experienced 17%increase in smartphone penetration (Flurry) over the period saw such high growth isnt explained. 7. Marketing your app in China Soko Media - Learn more at www.mobyaffiliates.com7Average Cost Per Install ($US)Source: YeahMobi/AppFloodAs you would expect, user acquisition in China is cheaper compared to mature markets. Above you can see theaverage CPI rates given to us by AppFlood, YeahMobi and Avazu, which compare nicely with the global average,illustrated according to AdParlor below.CPI by Territory (2013)Source: AdParlorCheaper CPIs, especially when it comes to Android, mitigates the risk of running a campaign in China, giving youmuch more room for experimentation. This is particularly important when you consider the complexity of theChinese market from a Western perspective which well get into a bit further below.AppFloods Francis Bea reminds us that while user acquisition is very low, developers need to understand thegoal of any app promotion campaign in China. 8. Marketing your app in ChinaAppFloods Francis BeaThe cost of acquiring a single user is cheap $0.29. Thats an attractive value proposition,which put into perspective a U.S. user could cost $1.00 $1.50. But this is assuming that allthe developer cares about is boosting their user base Chinese users are known to quicklyjump from app to app (low retention) and spend little on in-app purchases. However, thewhales in China can spend in the upwards of tens or even hundreds of thousands of dollars. Soko Media - Learn more at www.mobyaffiliates.com8Average Revenue Per User for freemium Chinese users ($US)Source: YeahMobiAlthough Average Revenue Per User is very dependent on the app in question, YeahMobi has given us theirestimate for ARPU for freemium titles across iOS and Android, which you can see above. According to Distimo,ARPU for freemium iOS apps in the US is around $0.93. Proceed with caution here, but a high ARPU forChinese iOS users makes some sense. The iPhones user base in China just like in Brazil is likely to have alarge concentration of high earners due to the comparatively high cost of Apple devices in China.App usage and engagementSo what type of apps are Chinese users downloading and whats their usage patterns like? China follows therest of the world with mobile games dominating the charts. In fact, according to Distimo, mobile games aremore popular amongst smartphone users in China than in any other territory worldwide. But perhaps moreinteresting is data from Flurry (2013), which shows Chinese users also over indexing in utility and reading apps.Flurry says the average time Chinese owners spend using Books, Newsstand, Utility, and Productivity apps isgreater than the rest of the world (1.8x, 1.7x, 2.3x, and 2.1x respectively). According to Flurrys data, ChineseAndroid users, on average, spend more than seven times as much time in Finance apps (7.4x) than Androidowners in other territories. Chinese Android users also spend more time in Entertainment apps (1.7x). 9. Marketing your app in China Soko Media - Learn more at www.mobyaffiliates.com9The importance of a wide selection of apps for smartphone buyers (%)Source: NielsenThe above data from Nielsen (2013) shows Chinese smartphone buyers are more concerned about theselection of apps on offer than smartphone buyers in the rest of the world. The only selection criteria that beatwide selection of apps, for Chinese users, was good value for money. Nielsen also says Chinese users comeout on top for news app usage globally, and come third overall in terms of app activity.Average number of apps installed and actively used apps (Q1 2013)Source: GoogleAbove is a chart based on a Google commissioned survey (2013) concerning the total number of apps currentlyon a users smartphone (paid and free) and the number of apps used in the last 30 days. Nielsens data on theimportance of apps to Chinese users doesnt quite tally with Googles data on actual installs (US is way aheadhere), but Chinese users certainly have a bigger appetite for apps than users in other emerging markets, such asBrazil, Russia and South Africa.Also worth noting is Flurrys data (2013) on locally developed-apps vs foreign-developed apps, which showsChinese users preferring apps developed on home territory. Chinese users spent 64% of their time in local apps,compared to USA users spending 59% of their time in local apps, and Brazillian users spending only 8% of theirtime in local apps. This leads nicely to our next section on the importance of localisation. 10. Marketing your app in ChinaApp localisation issuesUnlike emerging markets in Latin America, which require very little localisation, China is the only market wherelocalised apps are download more than English versions, according to inMobi. YeahMobis director Grace Leetold us the large amount of effort needed to localise apps for Chinese audiences makes the market difficult forsmaller developers to crackGrace Lee, Director, YeahMobiFor some smaller developers, and maybe some mid-sized, trying to promote your app in China may notbe a good choice, says Lee. Chinese apps often have very strong local properties and characteristics andChinese users do need apps matching local tastes. It can be a little hard for foreign developers to meetthis.Despite this difficulty there are a few success stories when it comes to foreign apps being localised toChinese audiences. A great example is the Chinese version of Fruit Ninja, which incorporated China-specificbackgrounds, Chinese-style swords, and other visual features to make the game more palatable to Chineseusers. Developers Halfbrick also changed the monetisation elements to be more in your face (as Chinese usersapparently need more encouragement) and used Chinese social channels to crowd-source further suggestionsfor improvement.However, Halfbrick outsourced most of this localisation to China-based developer iDreamSky and wisely so,says AppFloods Francis Bea. According to Bea, if youre not familiar with the Chinese market its imperative tofind a Chinese partner to help guide you through the localisation process.Dont assume that the Chinese market isnt that different from the Western app market, says Bea. Local Chinesepartners will know more than you do about the Chinese market, but more importantly have the crucial relationships.Also make sure that your app caters to the Chinese mobile consumption habits this might include offering China-specificcontent or re-skinning your app for the Chinese market. China is extremely different from the Western market. Soko Media - Learn more at www.mobyaffiliates.com10Dont underestimate the differences.When planning your app promotion strategy its also worth taking into account the multitude of...</p>