Many mobile enterprises across the globe find the Chinese mobile market just as mysterious as this ancient nation itself. It seems as if there is a barrier separating China and the world, where people on the inside are detached from the outside while those on the outside find it difficult to get an accurate and clear view of the inside. However, as a country predicted to generate $25 billion in mobile ad spend this year according to eMarketer, China is attractive for app developers because of its massive growth potential.
Challenges in the Chinese Market
For most overseas app developers, their hesitation of entering China is not because they are not interested in developing business in China or do not believe in its potential, but rather their concerns related to navigating the complex and different Chinese mobile market.
Let’s take a closer look at some of the challenges of User Acquisition in China and how they can be overcome.
iOS app marketers in China use ad networks as their main promotion channel. Users click on ads and are directed to an app page in Apple’s App Store where they can download the app. Ad networks then charge the advertisers on a CPI or CPC basis.
Tracking methods are similar to other global regions, where channel-specific tracking links and attribution analysis enable mobile marketers to measure the install source and subsequent in-app user behavior to understand each source’s ability to deliver quality users.
The problem begins with Android, which dominates with a 76% market share in China. Android fragmentation is the main factor that deters developers from making the leap to China. Like other Google services , Google Play is also blocked in China, driving the market to create numerous alternative app stores operated by third parties and mobile phone manufacturers.
The ratio of users covered by Android app stores in the Chinese market according to Newzoo is as follows:
When it comes to ad spend, about 3 of every 4 yuan goes to APK (Android Application Package) app stores, while the remainder is distributed to ad networks that direct users to the download page of an APK app store or lead them to directly download an APK.
Each store requires a different APK from the app developer, and then charges for promotion on a CPD (Cost Per Day) or CPI model in which the developer is charged for every single install from the store in question. So when it comes to attribution, the stores are like the ad networks. This creates daunting challenges for new global clients: managing multiple packages and working in a market where 3rd party stores are major players in the app promotion business, which makes it a completely different model than what they know.
By running with an unbiased and independent mobile measurement partner, marketers are able to overcome these challenges and track the number of installs from each 3rd party store, get data on app activations (first launch), in addition to marketing analytics so they can measure their LTV and ROI just like they know.
When the Android acquisition channel is an ad network, the original tracking methods also need to be modified as the final landing page URL is no longer a Google Play destination. For this there is an Out of Store solution in which the final url is the APK download link deployed on the ad network’s CDN.
Tracking solutions for the Chinese market are summarized in the following table:
Lastly, another important thing to remember is that to drive scale in China, marketers must ensure that their tracking provider is integrated with the 20+ top domestic ad networks that cover over 70% of traffic in China. These include Tencent Social Ads, which is one of the largest networks in China, covering their data and technology Platforms / WeChat / QQ / Myapp traffic, in addition to Bytedance (News Master), Domob, Limei, and Youmi. Last but not least there’s Ipinyou, the largest Re-targeting DSP in China.
In short, the Chinese app ecosystem is a different animal altogether. But it’s sheer size should at the very least encourage every global app developer to seriously examine its ability to go East.