The Chinese Android Market: What You Need to Know

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Android developers had better pay close attention to China.  If it continues along its current growth trajectory, the Chinese smartphone market could hit 400 million devices in 2013.  This is a 100% increase from January 2012.  At the same time, Android currently holds a 70% market share in China, which is expected to increase to 75-80% by the end of this year.  For those of you keeping count, that means there could be as many as 320 million active Android devices in China by the beginning of next year.  As China improves monetization , app revenues will increase dramatically.  If you want to succeed in the Chinese Android Market, here’s what you need to know.

Fragmented Chinese Android Market

The fragmented Chinese Android market is a huge setback to monetization.  Because of Google’s strained relationship with party officials, they took a hands-off approach to Android in China.  Google Play has become a relatively minor distribution channel in China, only supporting free apps.  The majority of Chinese Android apps are downloaded from several other app stores, each with varying credibility.  Some of the largest of these app stores include Snappee,  Baidu App Store (run by the Chinese search engine giant), Opera Mobile App Store, and Pandaapp.

Without Google to regulate the market, pirated games and malware have run rampant.  To make matters worse, there is no standard carrier billing system (a requirement for in-app purchases).

Keep in mind, the situation is improving.  By the end of the year the number of app stores is expected to consolidate to tens, instead of hundreds.  In addition, under the guidance of telecom giant China Mobile, carrier billing has been simplified, and Chinese users are getting used to one-click billing.  In-app purchases will  make up a much larger part of Chinese app revenue in the near future.

Chinese Gaming Culture

If you are thinking about developing for the Chinese Android market, you need to first consider the differences between Western and Chinese gaming culture.  In 2012, the top grossing Chinese iOS and Android game charts were dominated by MMO (massively multiplayer online) games and hardcore online games.  While we associate MMO’s with PC gaming, China’s extremely large audience for the sub-genre is trending toward mobile.

However, the Chinese Android market is shifting towards casual games, as their smartphone user base expands.  Over the next year, you should expect more casual single-player titles to reach the top-grossing charts.  This will continue to be the case as game studios improve monetization strategies, and carrier billing for in-app payments becomes standard.

Western developers make most of the top paid download games in China.  This is not because the Chinese have a preference for Western games, but because paid games are not very popular in China. In general, the Chinese don’t like buying games, but are willing to spend a lot within them.  They prefer to shop around through a lot of freemium games.  Once they find a game they like, the typical Chinese gamer tends to monetize at an extremely high rate.  Taking the Apple App Store in China as an example, all of the top 10 highest grossing games are freemium.  And freemium revenues are increasing: he top freemium iOS and Android games now earn around $1-2 million per month through IAP, twice what they were making 6 months ago.

(Pro Tip: Check out our Free EBook, The App Developer’s Guide to In-App Purchases)

What games will succeed in China?

As the number of smartphone users in China increases, expect to see more casual single-player games in the top-grossing charts.  Game studios will improve freemium monetization as carrier billing for in-app purchases is standardized.  Eventually, freemium games will dominate app revenue.

It is important to note that there has been a shift away from popular Western games towards Chinese titles.  As the Chinese user base grows, they are developing a preference for localized content, with themes, stories and dialog relevant to Chinese culture.  It is now common for popular Western games to be redesigned with Chinese characteristics.  To compete in this market, developers need to optimize games so that artwork, themes, and monetization are appropriate to how Chinese players like to pay and play.

Monetization is culturally different in China.  Chinese gamers not only buy virtual upgrades, the brag about buying them.  They like to show off premium items when they can.  This fits the general atmosphere of conspicuous consumption in the new China, where luxury fashion brands and cars are popular status symbols.  Smart designers can leverage that desire by making it easy for gamers to show off their paid-for items.

Security Concerns

A recent report from the Data Center of China Internet indicated that almost 35% of Android apps pull user data unrelated to the app.  Of the 1,400 apps in the sample, 66.9% tracked user data, while 34.5% tracked data that was completely unrelated to the task of the app.  This information included text message history, address books, call records, and location data.  In addition, 15% of apps also made calls or sent texts without the user’s consent.

Piracy is a constant problem in China, made worse by lack of oversight by app stores.  However, it is possible to protect your content and revenue.  Having a Chinese partner will likely help- China’s app stores are much more likely to heed the cease-and-desist warnings of a fellow Chinese tech company than a remote foreign developer.  In addition, piracy will hopefully decrease as the Android app stores are consolidated.

China may still be the “Wild West” for app developers, but that is all the more reason to enter the market now.  The number of devices speaks for itself.  Don’t sleep on the fastest-growing smartphone market in the world.  If you want to unload an app or two to focus on the Chinese market, head over to Apptopia.com, where we can give you a Free valuation!

This article has 3 comments

  1. Great Article. Made me wake up to my one sided ways. I will be developing a strategy for this in the near future.

  2. [...] a post i did recently on Android markets in China. I'd appreciate some feedback! What You Need to Know about the Chinese Android Market – Apptopia Inc. Reply With [...]

  3. Alarming report on lack of security.

    Of the 400 million devices:
    66.9% tracked user data, while 34.5% tracked data that was completely unrelated to the task of the app. This information included text message history, address books, call records, and location data. In addition, 15% of apps also made calls or sent texts without the user’s consent. This wouldnt happen on a regular GSM phone!

    To make things seem worse I saw a report on Macaffee, The Global Virus Threat Map of the world: http://home.mcafee.com/virusinfo/global-virus-map

    Obviously nobody seems to take security seriously. I have a degree in computer systems engineering, but focus on user interface design. However, even though I’m capable of understanding programming, securing a network is complicated and very difficult even for me.

    How can an end user secure heterogeneous devices with minimal effort? They might have an apple phone, and android tablet and a windows PC. Doing it on one platform is difficult.

    This all seems to be happening at an alarming scale. There aren’t that many programmers in the world to monitor everyones devices. Surely allot of this is automated.

    Why don’t they implement a authorization dialog every time your device requires internet traffic? So the network related components are only active while you use it.
    It would be like unlocking a door and then locking it again for that specific app.

    Obviously there is allot of potential in security development financially in addition to the game market.

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