Why Apple is coming under fire for its Chinese app offerings

Editor’s note: This was written by Kayla Matthews, a freelance writer focusing on technology and online media. You can find more of her work on VentureBeat, MakeUseOf, Motherboard and Gear Diary. 

The mobile smartphone application industry has been growing in China, and the market for apps in the country has huge potential. Besides fierce competition, companies and entrepreneurs that offer mobile apps in China also face challenges related to government regulations.

China has been making an effort recently to further regulate Internet content, and a recent part of that effort includes an inquiry into Apple’s app store content.

Prohibited Apps, the Chinese Government, and Apple

A recent report by Xinhua News Agency, China’s official press agency, said Chinese officials from the Beijing Cyberspace Administration, the Beijing Public Security Bureau and Beijing Cultural Market Administrative Law Enforcement Team planned to call on Apple to urge the company to perform more stringent checks on applications available in its app store.

According to the report, the inquiry seems to have been prompted in response to the actions of three third-party live streaming apps available in Apple’s app marketplace. The three apps from Chinese websites toutiao.com, huoshanzhibo.com and huajiao.com allegedly violated several Chinese regulations.

Some of the apps reportedly provided content that is banned in China including pornographic content. The article said that some violations would be referred to police.

A Lifted Ban With More Regulations

This isn’t the first time that Apple has run into trouble with the Chinese government. Apple’s iBooks Store and iTunes Movies launched in the country about a year and a half ago but were shut down just six months after they started. Apple also removed news app from the New York Times in December 2016 because of requests from Chinese officials, Apple said.

The company has also lost patent and trademark disputes in the country to Chinese competitors. China Central TV even called the iPhone a “national security concern” in 2014. These challenges are a big deal to Apple since around one fifth of its revenue comes from the country.

Apple isn’t the only tech company facing difficulties in China. In fact, it’s faced less than many others. Foreign services including Facebook, Google and Twitter are blocked in China. Apple is one of the few foreign companies allowed to offer its services there.

Last year, it seemed things were looking up for foreign companies looking to enter the Chinese market. In June 2016, China lifted its ban on foreign investments and a few outside companies were allowed to begin operating there.

At the same time, more regulations for mobile developers were introduced. A rule enacted last year to monitor postings and report any that include prohibited content to the authorities has tied the hands of some app developers.

It also requires developers to authenticate users’ identities through information such as cell phone numbers and compels app makers to maintain user logs for 60 days.

In January, China’s Cyberspace Administration began requiring government registration for all app stores. More recently, it enacted a bill that disallows apps that “endanger national security” or “disrupt the social order.” The New York Times app was the first to fall victim to the new law.

What This Means for App Developers

Although there are some challenges to launching apps and other tech products and services in China, that doesn’t mean it isn’t worth it. In 2016, the country contributed nearly half of all the iOS App Store’s annual growth. In fact, China is now the largest market for the iOS App Stores by over 15 percent. Users in China have on average more apps than a typical American user.

Changes in billing programs of China’s biggest carriers have made it easier for app developers to make money.

The recent incident with Apple, and the others before the latest one, give app developers some signs about what they should do to succeed in China. It shows us, first of all, that China has its own rules, and the environment for mobile developers is different than it is the U.S., Southeast Asian countries and anywhere else in the world.

This incident highlights what can happen if developers don’t follow the rules set by the Chinese government. It might not take much for the government to remove an app from the marketplace, which could be devastating after all the hard work developers put into their apps. Even more serious is the possibility of facing criminal punishment for violations.

Tips for App Developers

Since China’s app market is so potentially lucrative, it makes sense for developers to want to get in on the action. It can be tricky, so here are a few tips for breaking into the Chinese app market.

• Learn to Navigate the Fragmented Market

Since Google’s app store is banned in the country, lots of third-party app stores have popped up to serve Android users. These marketplaces have begun to consolidate in recent years, but there are still quite a few of them. Apple’s iOS market, on the other hand, has about 18 percent market share.

It’s easier to focus on either Android or iOS to start. Since iOS users seem to pay more, if your app requires paid users, focus on Apple. If user count is more important, focus on Android. You might find it helpful to hire a Chinese company or establish a team in China that’s already knowledgeable about the complicated Chinese app market.

• Know What’s Works in China

Getting a handle on what’s popular in China and what Chinese consumers respond well to can help you successfully break into the market. Games are especially popular in China. In the third quarter of 2016, they made up 75 percent of all app revenue.

Entertainment, video, social media and messaging apps have also begun gaining popularity. It’s important to have an understanding of Chinese culture before trying to reach Chinese users.

• Understand Marketing in China

China doesn’t have Facebook, Twitter or Google, so you can’t use those channels for your marketing. Instead you have to invest in advertisements in popular Chinese social media and messaging platforms like WeChat and Weibo. Keep your advertising casual, and make your copy sound natural, even if it’s been translated.