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We can endure the zero profit for 10 years but we cannot give up the Chinese market. It is an indispensable part of our global strategy,” said Phil Libin about the distribution in China.
As the CEO of cloud storage company Evernote, Libin cannot remember how many times he has been in China in these years. His most recent travel to China covered the partici- pation in the mobile Internet conference and the visit to its partners in China with the hope of finding some potential investment opportunities in this country.
“Before stepping into China, we were not very sure whether we need to develop the Chinese market or not, because we were told many times that Chinas might have some misunderstandings about the Internet companies from the Silicon Valley and many well-established IT com- panies ended with failure in this country,” said Libin. But now, they not only developed the new product “Image Note” for Chinese users, but also reached the cooperative agreements with China’s local Internet companies UC and Tecent to build its second data center after the one in the United States.
Flipboard, Angry Birds, Fruit Ninja and other popular APPs are planning to enhance their presence in China. What are attracting them are the 430 million mobile Internet users and the Chinese mobile Internet market which is large but far away from being fully used.
“Do as Rome Does”
Those Internet companies from the Silicon Valley daring to challenge the Chinese market seems not to be accompanied with good luck. No matter America Online, Yahoo and eBay several years ago or Groupon which just withdrew from China recently unexceptionally proved that foreign Internet companies are quite likely to suffer failure in China.
“We have to follow the rules of Chinese market if we want to get into China. This does not mean we make the Chinese version of our products. Instead, we need to combine product development based on the real situation of Chinese market,” Libin said.
To build a data center in China is an important step. As Libin has found, if Chinese users use Evernote’s serves in foreign countries, they may have the problems of slow synchronization and unstable services. In the future, the servers for “Image Note” in China will be separated from the ones in the United States and provide services for independent operation. The current users of Evernote in China can freely choose to move their data from the United States to China as they wish.
Evernote is also busy expanding its talent team in China. Several months ago it only had one employee in China. But now seven people are working for it and the team is going to have 30 people by the end of this year. The new employees will commit themselves to the design and development of Evernote’s products for global markets, maintenance of relations with developers, market expansion and users’ support. The fast distribution in China is likely to be the result of having an investor in China. On May 7, Evernote received the investment of 70 million U.S. dollars from CBC Capital, a fund specializing in sponsoring the development of IT companies.
Different from Libin, Mike McCue, CEO of Flipboard, a social exchange magazine applauded by Steve Jobs, came to China for the first time recently.
But the team with 50 people has already considered the Chinese market as the first destination of Flipboard’s travel of internationalization. Presently it has already reached the cooperation of China’s social media such as Sina Weibo and Renren.net.
“Six months ago Flipboard got onto the shelf of App Store for iPad in China. One month ago we launched the Chinese version for iPhone. Now we cannot publish the downloads in China, but we can say that there are several days in which the downloads of Chinese users are more than the U.S. users in such a short time,” said McCue.
As he said, Flipboard is going to launch the Android version soon. Since there are a lot of Android users in China, this market will greatly help Flipboard to increase the number of Android users globally.
And Rovio, the developer of famous game Angry Birds are thinking of further expansion in China.
Apart from the mobile marketing with Chinese local companies Domob and WQ Mobile, it has already begun to explore the field of gamerelated products. It even plans to build a theme park or playground of Angry Birds for children in every city of China.
“Three Mountains”
Compared with the traditional Internet, mobile APPs market has an easier access. The application stores like Apple’s App Store provide developers with a great platform of global platform. “If you have a good and popular product, you are likely to achieve success in different markets. This is attributed to the features of fast transmission and global universality of the mobile Internet,” McCue said.
Sun Peilin, an analyst from consultancy company Yiguan International shared the same opinion. “Some of the products of mobile Internet indeed have the chance to take on the way of globalization. For example, the tool-like products of Evernote has no problems of cultural differences. In comparison, the products of Internet service suppliers are more restricted by the supervision of policies, differences of contents in culture and variety with languages. They have higher threshold when it comes to the users.” Counterfeit, profit and localization are three major hurdles for the APP developers in China.
Shainiel Deo, CEO of Fruit Ninja’s developer Halfbrick, said that Fruit Ninja enjoys the highest utilization rate among iPhone users in China but it did not have a correspondingly high profit margin. “Though there are 100 million people playing Fruit Ninja in China, but a smaller part of them download the game after paying the money. In addition, we have a lot of imitation-based competitors.”
“Vegetable Ninja”, “Animal Ninja”… these are the counterfeits of Fruit Ninja in China. In China these imitation products are commonly called “Shanzhai”. Though “Shanzhai” is a problem, Shainiel Deo thought optimistically that smart users could feel the superiority of the real Fruit Ninja which is attributed to the diligence and wisdom of the developers.
Libin shares the same opinion, but he has stronger rivals in China, such the Dao Cloud Note from NetEase and MK Note from SDO.“In traditional competition, we attach importance to the challenges our rivals launched when it comes to the price. But now our software is free. The best method for us is not to worry about what other companies are doing. We only need to make better products.”
In comparison, McCue attaches more importance to the localization. Getting into the Chinese market neutralizes its advantages from the cooperation with Facebook, Twitter and many U.S. press houses. They need to rebuild the content cooperation and get to know the reading habits of Chinese users. He said: “We need to focus ourselves on the changes in Chinese market before we make fast reaction and implementation. This is a big challenge for us.”
As the CEO of cloud storage company Evernote, Libin cannot remember how many times he has been in China in these years. His most recent travel to China covered the partici- pation in the mobile Internet conference and the visit to its partners in China with the hope of finding some potential investment opportunities in this country.
“Before stepping into China, we were not very sure whether we need to develop the Chinese market or not, because we were told many times that Chinas might have some misunderstandings about the Internet companies from the Silicon Valley and many well-established IT com- panies ended with failure in this country,” said Libin. But now, they not only developed the new product “Image Note” for Chinese users, but also reached the cooperative agreements with China’s local Internet companies UC and Tecent to build its second data center after the one in the United States.
Flipboard, Angry Birds, Fruit Ninja and other popular APPs are planning to enhance their presence in China. What are attracting them are the 430 million mobile Internet users and the Chinese mobile Internet market which is large but far away from being fully used.
“Do as Rome Does”
Those Internet companies from the Silicon Valley daring to challenge the Chinese market seems not to be accompanied with good luck. No matter America Online, Yahoo and eBay several years ago or Groupon which just withdrew from China recently unexceptionally proved that foreign Internet companies are quite likely to suffer failure in China.
“We have to follow the rules of Chinese market if we want to get into China. This does not mean we make the Chinese version of our products. Instead, we need to combine product development based on the real situation of Chinese market,” Libin said.
To build a data center in China is an important step. As Libin has found, if Chinese users use Evernote’s serves in foreign countries, they may have the problems of slow synchronization and unstable services. In the future, the servers for “Image Note” in China will be separated from the ones in the United States and provide services for independent operation. The current users of Evernote in China can freely choose to move their data from the United States to China as they wish.
Evernote is also busy expanding its talent team in China. Several months ago it only had one employee in China. But now seven people are working for it and the team is going to have 30 people by the end of this year. The new employees will commit themselves to the design and development of Evernote’s products for global markets, maintenance of relations with developers, market expansion and users’ support. The fast distribution in China is likely to be the result of having an investor in China. On May 7, Evernote received the investment of 70 million U.S. dollars from CBC Capital, a fund specializing in sponsoring the development of IT companies.
Different from Libin, Mike McCue, CEO of Flipboard, a social exchange magazine applauded by Steve Jobs, came to China for the first time recently.
But the team with 50 people has already considered the Chinese market as the first destination of Flipboard’s travel of internationalization. Presently it has already reached the cooperation of China’s social media such as Sina Weibo and Renren.net.
“Six months ago Flipboard got onto the shelf of App Store for iPad in China. One month ago we launched the Chinese version for iPhone. Now we cannot publish the downloads in China, but we can say that there are several days in which the downloads of Chinese users are more than the U.S. users in such a short time,” said McCue.
As he said, Flipboard is going to launch the Android version soon. Since there are a lot of Android users in China, this market will greatly help Flipboard to increase the number of Android users globally.
And Rovio, the developer of famous game Angry Birds are thinking of further expansion in China.
Apart from the mobile marketing with Chinese local companies Domob and WQ Mobile, it has already begun to explore the field of gamerelated products. It even plans to build a theme park or playground of Angry Birds for children in every city of China.
“Three Mountains”
Compared with the traditional Internet, mobile APPs market has an easier access. The application stores like Apple’s App Store provide developers with a great platform of global platform. “If you have a good and popular product, you are likely to achieve success in different markets. This is attributed to the features of fast transmission and global universality of the mobile Internet,” McCue said.
Sun Peilin, an analyst from consultancy company Yiguan International shared the same opinion. “Some of the products of mobile Internet indeed have the chance to take on the way of globalization. For example, the tool-like products of Evernote has no problems of cultural differences. In comparison, the products of Internet service suppliers are more restricted by the supervision of policies, differences of contents in culture and variety with languages. They have higher threshold when it comes to the users.” Counterfeit, profit and localization are three major hurdles for the APP developers in China.
Shainiel Deo, CEO of Fruit Ninja’s developer Halfbrick, said that Fruit Ninja enjoys the highest utilization rate among iPhone users in China but it did not have a correspondingly high profit margin. “Though there are 100 million people playing Fruit Ninja in China, but a smaller part of them download the game after paying the money. In addition, we have a lot of imitation-based competitors.”
“Vegetable Ninja”, “Animal Ninja”… these are the counterfeits of Fruit Ninja in China. In China these imitation products are commonly called “Shanzhai”. Though “Shanzhai” is a problem, Shainiel Deo thought optimistically that smart users could feel the superiority of the real Fruit Ninja which is attributed to the diligence and wisdom of the developers.
Libin shares the same opinion, but he has stronger rivals in China, such the Dao Cloud Note from NetEase and MK Note from SDO.“In traditional competition, we attach importance to the challenges our rivals launched when it comes to the price. But now our software is free. The best method for us is not to worry about what other companies are doing. We only need to make better products.”
In comparison, McCue attaches more importance to the localization. Getting into the Chinese market neutralizes its advantages from the cooperation with Facebook, Twitter and many U.S. press houses. They need to rebuild the content cooperation and get to know the reading habits of Chinese users. He said: “We need to focus ourselves on the changes in Chinese market before we make fast reaction and implementation. This is a big challenge for us.”