Overseas App Developers Entering China Market

In the past, we often heard stories about Chinese App developers and technology companies going out of China. They have steadily fought steadily in Southeast Asia, North America, Africa and other places, step by step towards success. This kind of adventure and hard work is indeed eye-catching, but who has ever thought of helping overseas App developers enter the Chinese market?

As of September 30, 2020, China has 181 listed Internet companies, with a total market value of 16.8 trillion yuan. China’s Internet market is very large, but the story of overseas App developers entering the Chinese market is almost blank.

Overseas App developers have a lot to do in China

In recent years, the disappearance of mobile Internet dividends has become the consensus of the industry. Relying on the mobile Internet, it is no longer possible for unicorns to appear again, because the market has entered a relatively stable stage of development.

The probability that ordinary entrepreneurs want to succeed is getting lower and the cost is getting higher and higher, while Chinese Internet giants are vigorously developing in emerging fields such as livestreaming, online education, and online office, leaving little room for entrepreneurs to survive.

The dividends of the mobile Internet are indeed gradually disappearing, but many people have overlooked the other side of China’s Internet industry.

1. User scale and user habits

According to CNNIC’s data, as of June 2020, the number of Chinese Internet users reached 940 million, and the Internet penetration rate reached 67.0%. Statistics from the International Telecommunication Union show that the global Internet penetration rate in 2019 is expected to be 53.6%. The Internet penetration rate in China is far above average.

2. Chinese consumers’ consumption behavior on the mobile Internet

In 2018, global consumer spending on apps reached 101 billion U.S. dollars, of which the Chinese market accounted for nearly 40%, about 40.4 billion U.S. dollars. In the first half of 2020, the actual sales revenue of China’s online game market was 139.493 billion yuan, a year-on-year increase of 22.34%. As early as the Q3 quarter of 2016, China surpassed the United States and became the market with the highest revenue in the App Store, Apple’s official app store.

3. Network infrastructure

As of the end of September, the number of 4G users in China was 1.293 billion. In September, the average mobile Internet access traffic per household reached 10.86GB per household, a year-on-year increase of 29.4%.

In the past 20 years of development, Internet applications are everywhere. China has a huge user base and a huge consumer market. Who doesn’t want to develop in China’s Internet industry? However, overseas App developers have many pain points to enter the Chinese market.

First of all, overseas App developers need to comply with China’s local laws, regulations, and qualifications. The Chinese market has different policy requirements for different categories of applications. There are different regulatory requirements for data privacy and security, category access laws, tax laws, and game publishing service management.

Secondly, overseas App developers will face localization problems, such as language, culture, and user habits, which are different from the location of the App developer. This leads to the success of overseas App developers’ applications, not just simply doing a ” Chinese version” is fine.

There is also the issue of application distribution. In the international market, App developers only need to deal with App Store and Google Play. However, the Chinese application store market is very fragmented, with both mobile phone manufacturers’ own application stores and third-party application stores such as Wan Doujia and Yingyong Bao. If overseas App developers want to play well with Chinese application distribution, it will be very cumbersome and complicated.

Finally, the issue of cost. If overseas App developers operate the entire set of application development, operation, and promotion by themselves, the cost of manpower and financial resources will be very high.