Look Out, World!

On top of being the world’s largest phone market with the greatest number of netizens, and the nation with the most iOS downloads, China’s is casting off an image of frugality–“to pay is to die” no longer applies here–as in Q3 this year, China becomes iOS App Store’s most valuable patron, found App Annie’s in a recent report.

Revenue coming from China surpassed the US by 15% in the last quarter, coming down to 1.7 billion USD, 15% higher than the United States, a total that is taking the world to uncharted territories in terms of the amount spent by any nation in a single quarter.

Maintaining the trend from the last quarter when China overtook the U.S. as the leader in game category spending, the sub-sector that brings in the lion’s share of revenue (75%, says App Annie), China was again the world’s most generous in this quarter in this respect.

Paying for games is conventional you might argue, but the biggest change this quarter, with Chinese users dishing out more in total, not just in games, was tripled spending in entertainment (iQiyi, Tencent Video, Youku), and Social Networking (QQ, Momo–China’s Tinder, and Inke, a popular live-streaming platform).

The days when companies and investors eyed the Chinese market warily, knowing how users are notoriously price sensitive and are willing to take painstaking measures to find a costless alternative, are behind us. That era was put to an end with the rise of paid memberships for quality video content around 2014, which users eagerly lapped up. Today, more and more companies are seeking to “monetize” through paid services and content, charging membership for everything from faster downloads, membership to watch live football games, to virtual currency for doling out (virtual) “yachts” and “Ferraris”  to their favorite plastic-enhanced cyber stars.

China’s new leading position in iOS app spending echoes the buzzword “consumption upgrade”, which essentially means that the rising middle class and the younger generation, as they come of age, are willing to splurge a little, choosing quality, uniqueness and convenience over price. As App Annie puts it, “If China wasn’t a key priority in your app strategy, it should be now”, and prescribes a “tailored go-to-market strategy” that goes beyond translation to penetrate into China. 

But as China marches to the front of the check-out line on iOs stores, however the Android app market is a completely different story- a fragmented market of more than 200 independent stores are opted over Google Play, which isn’t completely disabled in China, but a series of hurdles from rooting your phone to restoring initial settings, Google Play is literally inaccessible without advice from forums video walk-throughs.

Image credit: App Annie

April Ma

Based in Beijing, April Ma writes on tech trends and covers startups that may (or may not) be the next BATs. Reach her at April.ma@technode.com or Mafangjing (Wechat).