And indeed she has! Whether it is a change in the country's leadership, the $1.5 billion war-chest that Baidu, a home-grown tech behemoth is expected to unleash for mergers and acquisitions overseas or even the latest Bond flick that features Shanghai & Macau China is now more in focus than ever before.
My colleague Arun wrote about app discovery, independent app stores and the need to localize in an earlier post. One of the aspects he highlighted was the presence of numerous independent app stores like Appchina, Gfan among others that are preferred for Android app distribution considering Google Play is almost non-existent in the country. Such is the lure for apps and the possibilities the ecosystem offers that even an e-commerce site like 360 Buy with its $400 Mn Series D funding has launched an app store! Competition is tough; both for app stores as well as for app developers. But then competition is a way of life in China. When I enrolled for conversational Mandarin classes earlier this year, my teacher was an 18 year-old Chinese student studying in India. A national-level swimming-champion, he asked us to guess how many national-level champions China had an astonishing 10,000 plus! If you extrapolate that statistic and apply it to the app-ecosystem you begin to realize how big, how crowded it can get. Surely, if app developers can survive and thrive in a market as nuanced as China, they can make it on the global arena.
A country with 1 billion mobile phones, projected to have 192 million mobile game players by end of 2012 would surely be big enough to make money from, right? Not really. For a country that is second only to US for app downloads, China is 8th in terms of revenue generated from apps. App piracy is a big concern; there are instances where an app developer is not even aware of his apps being listed on local app-stores. A clear cause for revenue leak, piracy continues to make China a difficult market to make money from. Some believe that piracy is just one reason; other reasons are more cultural given how price-sensitive users tend to be here. For most app developers, revenue mostly comes in from global markets, contribution from China being as little as 1.5% on average for top 10 developers. And then there are other issues that arise out of hyper-competition. China has more than 70 ad networks. In a desperate bid to survive, many bleed because they payout more than they should. In worse cases, some resort to opaque billing practices leaving developers with little or no money and a worrisome trust deficit.
InMobi's foray into China has been as much about learning as it has been about unlearning. Relationships with developers like Radical have for example, been rich in many ways. From being able to assist them in customized technical solutions to increase revenue to signaling what apps from their portfolio were outperforming others, we've been able to don a partner-hat which has been mutually beneficial. Elex-Tech has apps spanning Games, Personalization and Utility among other categories. They are happy with InMobi's proactive effort at maximizing revenue for them. A big part of this is again based on drawing their attention to insights and keeping communication channels open. For Ruixin working with InMobi has resulted in an eCPM jump of 50%. A big reason for this has been ad delivery that is extremely targeted to Ruixin's user profile. They are quite appreciative of InMobi's ad quality. Obviously buoyed by the initial success, they are hungry for more! Above all, trust and transparency have helped InMobi cement these relationships.
By no means is China at its full potential yet, in fact the journey is just starting to get really interesting. To go by the sheer scale of numbers and estimate massive revenue opportunities blindly in this market would tantamount to naivety. Or would it? But there certainly is some way to go before those massive dollar numbers start manifesting in the app business too. Luckily for app developers in China, given the global nature of the app-business, teaming up with an overseas partner is proving to be a popular way to establish a foothold globally. The reverse is also true. US gaming developer Kabam for instance sourced talent from China for its popular iOS app Kingdoms of Camelot: Battle for the North" which was developed in Beijing. The beauty of competition and the passion to build businesses the right way is that they inevitably lead to innovative, resourceful solutions. Throw in rapid changes in the fray like the market dominated by Android (68% market-share) witnessing soaring iPad sales and you get new opportunity areas hitherto non-existent. We at InMobi are looking forward to the rest of this China-story unfold. We think it will be one hell of ride!