Navigating the Chinese App Market: A Comprehensive Guide for Launching Your App

The Chinese app market stands as a beacon of opportunity, brimming with potential yet marked by its distinctiveness. This landscape is not just vast but varies significantly from its Western counterparts, making it a fertile ground for expats and companies looking to expand their digital footprint. The allure of tapping into this market lies not only in its sheer size but also in the unique preferences and behaviors of Chinese consumers. Understanding this market's intricacies is akin to unlocking a treasure chest of opportunities.

Contributing Advisor

Phoebe Yan

Partner

However, the path to success in China's digital realm is paved with challenges. It requires a deep dive into the cultural nuances that shape consumer behavior and preferences. Recognizing and respecting these differences is crucial for any app looking to gain a foothold in this dynamic market.

Moreover, navigating the local regulatory environment adds another layer of complexity. China's digital ecosystem is governed by a set of regulations that can seem daunting to outsiders. These laws not only dictate the operational aspects of apps but also encompass data privacy, cybersecurity, and content censorship norms. Staying abreast of these regulations and ensuring compliance is imperative for any business aiming to operate successfully within China.

Understanding the Chinese app market

The journey to launch an app in China is a venture that demands not just significant financial investment but also a deep understanding of the market's complexities. The Chinese app market, with its vast user base and unique digital ecosystem, presents a lucrative opportunity for those prepared to navigate its challenges.

The vast landscape of Chinese mobile users

With over 911 million smartphone users, the average Chinese mobile user has around 65 apps installed and dedicates approximately 5.1 hours daily to app usage. These figures highlight the critical importance of China for companies aiming for global app distribution. However, success in this market requires more than just launching an app; it demands a strategic approach tailored to the preferences and behaviors of Chinese users.

The dominance of local giants

The Chinese app market is distinct from its Western counterparts, largely due to the absence of familiar platforms like Google Play Store and governed Apple App Store. Instead, the market is dominated by local tech behemoths such as Huawei, Oppo, and Tencent.

These entities not only control significant portions of the app distribution network but also own popular apps that span across various categories, from social media and entertainment to essential services like online shopping and food delivery. Understanding the influence of these key players is crucial for any company looking to make its mark in China.

A unique digital ecosystem

China's digital landscape is tightly regulated by the government, creating a unique ecosystem where the Great Firewall plays a pivotal role in shaping internet access and content. This has led to the exclusion of many Western tech giants and necessitated a unique approach for foreign companies wishing to enter the Chinese market. Adapting to this environment involves not just compliance with strict regulatory requirements but also a keen sensitivity to the cultural and social nuances that define consumer preferences.

For instance, Apple's decision to remove VPN apps and construct a data center in China, in compliance with local regulations, exemplifies the level of adaptation required. This regulatory framework has significant implications for app development and marketing strategies, emphasizing the need for thorough research and local partnerships.

Regulatory compliance and intellectual property

License and certification

Launching an app in China requires obtaining:

• China Company Registration Certificate;
• China Business License; and,
• Relevant software and ICP/EDI licenses.

All mobile applications (“apps”) and so-called in-app “mini programs” must be registered with The Ministry of Industry and Information Technology (MIIT) before they can be launched. The registration requirement is meant to help the MIIT crack down on telecommunications and internet fraud.

The new requirements apply to all new apps and mini-programs from September 1, 2023, onward, while all existing apps and mini-programs will have until March 31, 2024, to register.

The need for these licenses varies depending on your app's functionality and how it's delivered to customers. Notably, the ICP license, crucial for apps with an online presence, has specific ownership restrictions, highlighting the importance of understanding these regulatory nuances before entering the market.

If your app is a game, you must obtain a gaming license from the National Administration of Press and Publication (NAPP). This is also known as a Game Registration Number (GRN) or ISBN because an ISBN number is issued once your game is accepted.

App registration procedures

We will refer to apps and mini-programs collectively as “apps” in this article unless otherwise noted. The entities responsible for the apps are also collectively referred to as “app operators”.

App operators must fill out an “Internet Information Service Registration Form” (“Registration Form”) and a commitment letter by logging on to the “National Internet Basic Resource Management System” (also known as the ICP/IP Address/Domain Name Information Registration Management System, hereinafter referred to as the “registration system”). The telecommunications authorities (电信主管部门) may adjust the contents of the “Registration Form” and relevant commitment letters based on the actual situation from time to time.

The information on the registration form includes (but is not limited to):

• Basic information of the app operator, such as the company name, properties, address, and company certificate type (such as business license) and number;
• Basic information of the representative of the app operator, including, identity card information, contact numbers, and email address;
• Basic information on the ICP representative, such as name, identity card information, contact numbers, and email address;
• Information on the app, such as the app name, domain name list, package name or ID, operating platform, SDK, and so on; and
• Information on the ISP, such as ISP name, access method and server location, and IP address list.

Internet Information Services Registration Form

The app operators that provide services such as news, publishing, education, film and television, religion, and so on are also required to submit documents reviewed and approved by relevant competent authorities (documents proving they are authorized to engage in these fields, such as industrial qualifications or approvals) to the provincial communications bureau where they are domiciled.

The app internet service providers (ISPs) and distribution platforms (such as app stores) are required to verify the user identities, network resources, and other information of organizations or individuals planning to engage in app services. The ISPs and distribution platforms are not permitted to perform any tasks on their behalf when they know or ought to know that the information is inaccurate.

The app operators need to register with the provincial-level communications bureau (通信管理局) where they are domiciled.

To make the registration process easier for the app operators, it is the responsibility of the ISP or distribution platform to submit an online application to the communications bureau (a department under the MIIT), where the app operator is domiciled through the registration system. This means that app operators do not need to go to the communications bureau to apply.

The information needed for registering an app is the same as for website registration. This means that entities that have previously completed website registration procedures do not need to fill in the information on the subject identity in the registration form, and only need to supplement the app-related information.

Registration results and post-registration obligations

• Upon receipt of complete and accurate materials, the provincial-level communication administration will:
  • Finalize the registration within 20 working days.
  • Publicly disclose registration information through the registration system.
  • Issue a registration number to the applicant via text message or email.
  • Allow applicants to check the application status on the registration system website.
• If the submitted materials are incomplete or inaccurate:
  • The provincial communications bureau will reject the application.
  • A detailed explanation for the rejection will be provided.
• App operators must:
  • Display the registration number prominently within the app (e.g., in settings or introduction).
  • Provide a link to the registration system website below the registration number for public verification.
• Distribution platforms are required to:
  • Prominently display the registration number of the app.
  • Submit the app's registration number information to the telecommunications authorities.
• ISPs, distribution platforms, and device manufacturers are:
  • Prohibited from providing network access, distributing, or pre-installing apps that have not completed the registration procedures.

Registering mini-programs on WeChat

The ISPs, app distribution platforms, and super-apps that host mini-programs are required to assist the app operators in registering the apps. To this end, several platforms have already provided guidelines and channels for the app registration procedures, including Baidu App and Alipay.

The messenger super-app WeChat, one of the largest hosts of mini-programs in China, has also set up a channel for registering mini-programs on the platform and developed a corresponding guide. We use this guide as an example of the procedures to register a mini-program.

The following materials and procedures need to be submitted:

• The operator’s certificate (business license);
• Color scan or photo of the ID card of the person in charge (with at least one month validity);
• Color scan or photo of the ID card of the person in charge of the mini program (with at least one month validity);
• Facial verification by the person in charge of the mini-program; and
• Any other supplementary materials required by the provincial communications bureaus.

Mini program operators can register by logging in to the mini program management website, filling in the registration material, and uploading the required materials.

After submitting the registration information, WeChat will complete an initial review within one to two working days and notify the applicant of the result. The guide notes that the applicant should keep their phone lines open in case the platform needs to contact them to verify the registration information.

The next step after the initial review has been completed is text message verification. The applicant will receive a text verification from the number 12381. The applicant must then log in to the MIIT’s registration system to complete the text verification within 24 hours of receiving the message. Once the text message verification has been completed, the registration application will enter the communications authorities review process.

The communications authorities will then complete the review within 20 days, after which the registration number will be issued.

Consequences for non-compliance

Apps that existed before these new requirements have until March 31, 2024, to complete the registration. Between April and July 2024, the MIIT will inspect the apps that have been given internet access, distributed, and pre-installed by ISPs, distribution platforms, and device manufacturers. Any apps that have not completed the registration procedures and are engaged in illegal activities will be dealt with according to the law.

From July 2024 onward, the provincial-level communication authorities will regularly organize for the ISPs, distribution platforms, and device manufacturers to assess the accuracy of apps’ registration information.

Apps that have not been registered cannot be provided internet access by ISPs, hosted by distribution platforms, or pre-installed on smart devices by device manufacturers.

Internet censorship and content restrictions

The Chinese government enforces stringent internet censorship, famously known as the "Great Firewall of China," which significantly impacts the accessibility of foreign apps and websites. Giants like Google, Facebook, and YouTube find themselves blocked, compelling companies like Apple to adapt by removing certain apps to comply with Chinese regulations. This level of control extends to the censorship of content deemed illegal by the authorities, highlighting the need for apps to align with local content guidelines meticulously.

For businesses aiming to penetrate the Chinese market, understanding, and navigating these restrictions is paramount. This involves not only adapting content and services to fit the regulatory framework but also engaging with local telecommunication and technology partners to implement necessary technical measures.

Intellectual property protection

Intellectual property (IP) rights protection forms the cornerstone of launching an app in China. The Chinese market is known for its rigorous approach to IP, making it essential for businesses to register their trademarks and patents to safeguard their assets. Despite a widespread misconception, obtaining a Chinese Software Copyright Certificate (SCC) is not mandatory for legal copyright protection but is highly recommended for enforcing IP ownership. This process involves navigating the Copyright Protection Centre of China's requirements, including translations and notarizations of documents.

Collaborating with a local partner can significantly streamline the SCC application process, reducing the timeframe and enhancing the likelihood of acceptance by major Chinese app stores. Additionally, industry-specific documentation and a Security Assessment Form are often required, underscoring the importance of comprehensive preparation to meet China's legal standards.

Data privacy and security regulations

The recent enactment of the Personal Information Protection Law (PIPL) and the Data Security Law in China has introduced a regulatory framework similar to the GDPR in Europe, emphasizing user consent for data collection and stringent data localization measures. These laws necessitate that businesses not only secure user data through encryption and local storage solutions but also rigorously monitor user-generated content for compliance with local laws.

Businesses must navigate the complexities of cross-border data transfer regulations, requiring prior approval from the Cyberspace Administration of China for storing user information locally and transferring it across borders. This underscores the need for an integrated approach to data management, ensuring that all aspects of app operation are strictly adherence to Chinese regulations.

Market entry strategies

For foreign app developers looking to make their mark, deciding between partnering with local companies or attempting an independent launch, comprehending the distribution channels, and learning from successful market entries are parts of a feasible market entry strategy.

Local partnerships

Partnering with local companies has proven to be a key strategy for foreign app developers aiming to penetrate the Chinese market. The value of local partnerships extends beyond logistical support; they also serve to establish credibility and trust among Chinese users, who may view foreign brands with scepticism. Building these relationships requires time, effort, and a commitment to active engagement with local entities.

Distribution channels

The distribution landscape in China differs significantly from other markets, particularly for Android developers due to the absence of Google Play. While the Apple App Store remains available, content must be localized into Chinese. Android developers, on the other hand, must navigate a myriad of local app stores such as:

• Tencent MyApp;
• Oppo App Store;
• Huawei App Store;
• 360 Mobile Assistant;
• Xiaomi App Store;
• Baidu Mobile Assistant; and,
• VIVO App Store.

Each of these platforms has its own set of requirements and user base, making it essential to have a presence across multiple stores to maximize reach and engagement.

Case studies

Learning from successful market entries offers valuable insights for new entrants. Disney's collaboration with Tencent is a testament to the effectiveness of strategic partnerships. Moreover, the adaptation of services to local preferences and regulations is a common thread among success stories. Integrating local payment methods, for example, has enabled foreign apps to tap into China's vast digital payment ecosystem, enhancing user experience and driving revenue.

Effective marketing and promotion in China

Crafting a marketing strategy that resonates with local consumers is crucial for expats' and companies' success. Successful marketing and promotion in China require a multifaceted approach that is specifically tailored to the Chinese market. By adopting these strategies, expats and companies can effectively navigate the complexities of the Chinese market, building brand awareness and fostering engagement among one of the world's largest consumer bases.

Integrating with Chinese social media and services

Social media integration is a staple feature for apps worldwide. However, in China, developers must shift from international platforms like Facebook and Twitter to local alternatives such as:

• WeChat is a widely popular chat app in China. It serves as an alternative to WhatsApp for Chinese users.
• Weibo is a microblogging network that serves as a Chinese counterpart to Twitter.
• Youku Tudou and Bilibili: These are China's YouTube equivalent.

Similarly, common services such as push notifications and mapping must be replaced with local equivalents like Push, Baidu Maps, and Gaode due to restrictions on Google services, even though it will depend on the underlying system’s design and may vary from platform to platform. Payment integration also requires a local approach, with Alipay and WeChat Pay being the dominant providers, offering a seamless in-app purchase experience to Chinese users.

Influencer marketing

Influencer marketing, or collaborating with Key Opinion Leaders (KOLs), has proven to be an exceptionally effective strategy in China. These influencers have the power to sway public opinion and can bring significant visibility to your brand. The key to successful influencer marketing lies in selecting influencers who align with your brand's values and can authentically engage with your target audience. This alignment fosters trust and loyalty among consumers, potentially leading to viral growth for your brand.

QR code marketing

QR codes are ubiquitous in China and offer a seamless way to connect with consumers. By incorporating QR codes into promotional materials, products, or even physical locations, businesses can direct users to their apps, websites, or social media pages, enhancing user engagement. This strategy leverages the Chinese consumer's comfort with mobile technology and QR codes for everything from payments to accessing information, making it a powerful tool for increasing visibility and user acquisition.

Localization-specific strategies

Cultural adaptation

To truly connect with Chinese consumers, an app must go beyond simple translation and deeply integrate cultural nuances into its design and functionality. Consider Starbucks in China: by offering menu items like the Red Bean Frappuccino, they tapped into local tastes and preferences, demonstrating a successful cultural adaptation. Similarly, apps entering the Chinese market should incorporate elements that reflect local customs, symbols, and social norms. This might include adjusting your app's features to align with popular Chinese platforms like WeChat for social media integration or adapting payment options to favor local services such as WeChat Pay or Alipay.

Language and content localization

Effective localization involves more than translating text; it's about conveying the right message in a culturally relevant way. This means not only translating your app's name, description, and content into Mandarin or other regional languages but also considering the cultural context of your messaging. Utilize professional localization services to ensure accuracy and cultural sensitivity. Additionally, be mindful of China's strict internet regulations by adapting your app's metadata and content to comply, avoiding sensitive topics that could lead to censorship or legal issues.

Adapting UI/UX to local preferences

The design aesthetic preferred by Chinese users often differs markedly from Western preferences. While minimalist designs are favored in the West, Chinese apps tend to feature a more text-heavy UI with numerous Calls to Action (CTAs). This design choice caters to the local audience's expectations for information density and interactive elements. Therefore, when designing your app for China, consider incorporating a UI that balances information with usability, reflecting the complexity and richness of the Chinese language and cultural preferences.

Monetization models for the Chinese market

This table outlines the primary monetization strategies in the Chinese app market, highlighting the distinct advantages and hurdles each method faces:

Technical considerations for app launch

Launching an app in China involves essential technical considerations for expats and companies aiming to introduce their apps to the Chinese market, focusing on local payment integration, server, and infrastructure requirements, and overcoming technical barriers to ensure a smooth user experience.

Local payment integration

The integration of local payment methods is critical in China, where mobile payments via platforms like WeChat Pay and Alipay dominate the market. To cater to the local user base effectively, ensuring your app supports these payment methods can significantly enhance the user experience and increase adoption rates. This integration not only facilitates easier transactions but also aligns your app with Chinese consumers' payment habits and preferences.

Server and infrastructure requirements: data localization needs

Given the unique digital ecosystem in China, China's internet infrastructure differs notably from many Western countries, significantly emphasizing data localization. Foreign apps must ensure their servers are located within China to operate smoothly and comply with Chinese regulations. This localization is not just a technical requirement but a legal one to ensure faster loading speeds and reliable access for nationwide users, even those on slower internet connections or limited data plans.

Overcoming technical barriers

• Optimize your app for various network conditions to ensure a smooth user experience across different internet speeds and data plans in China.
• Ensure compatibility with local technologies to integrate seamlessly into the Chinese digital ecosystem.
• Adhere to regulatory requirements governing digital content and transactions in China to maintain compliance and avoid legal issues.
• Focus on fast loading times and minimal data usage in your app's design to accommodate the variability in the Chinese population's internet access.
• Navigate the licensing process for app operation in China, understanding the specific requirements for your app, including whether you need an ICP license for online activities or an EDI license for certain types of digital engagement.
• Prepare thoroughly for the complexities of launching an app in China, considering the partnership with local experts who can guide you through the regulatory and technical landscape.

Post-launch support and maintenance

Post-launch support and maintenance are about more than fixing bugs; they are about continuously enhancing the user experience, engaging with the community, and adapting to the evolving landscape of the Chinese market. Ex-pats and companies can ensure their apps remain relevant and successful in China's competitive digital ecosystem by prioritizing customer support, community engagement, and continual optimization.

Customer support

Offering customer support in the local language is not just a courtesy; it is a necessity. A resolute local team or a partnership with local experts can ensure inquiries, complaints, and feedback are addressed promptly and effectively. This level of support helps in building trust and loyalty among users, which are key to customer retention in a competitive market like China.

Engaging with Chinese users

Community management is about more than just addressing user concerns; it is about building a relationship with your audience. Utilizing platforms such as WeChat, local forums, and email to engage with users is vital. Creating content that resonates with the target audience's interests fosters a sense of community, increases brand awareness, and encourages user engagement. Managing these communities and engaging in conversations can significantly enhance user experience and brand perception.

Adapting to feedback and market changes

Continual optimization of your app, based on user feedback and market research means translating new features and adapting them to align with cultural preferences and trends. Visual elements, graphics, and interface design should be localized to improve usability and appeal to Chinese users.

Localizing app updates and new features requires a deep understanding of regional preferences and cultural nuances. Regular market research and localization testing are critical before rolling out updates to ensure they meet the users' needs and comply with local regulations.

 User feedback, especially reviews on app stores, plays a significant role in influencing potential users' decisions. Establishing a system for monitoring and promptly responding to this feedback is crucial. Tools like App Store Connect can facilitate direct engagement with users' reviews, allowing for a more personalized response strategy. Efficient customer support channels, such as email or social media, ensure users' concerns are addressed swiftly.

When updating your app, considering user feedback demonstrates a commitment to user satisfaction and can lead to improved engagement rates. It shows that you value user input and are dedicated to refining your app to serve the Chinese market better.