With the downward trend in advertisement spending, which Chinese Apps are launched overseas?
First of all, in the overseas market, the overall advertising expenditure budget of advertisers is a downward trend this year. Take the United States as an example. According to the data of Visual Capitalist, in 2020, the advertising spend of the top 100 advertisers in the United States decreased by 13% compared with last year, which is the most serious decline in recent decades.
In terms of mobile advertising, according to eMarketer data, in March, when the epidemic situation in the United States was not serious, it was expected that the expenditure of the U.S. mobile advertising market will increase by 20.7% year on year in 2020, but only 4.8% year on year in June.
However, based on the data of APP Growing Global, we can see that under the downward trend, some changes have taken place in the promotion of Chinese applications that go abroad. For example, the category of apps that go abroad vigorously is a very important dimension.
For Chinese apps publishers overseas, the hottest track in 2020 is online reading
Let’s take a look at the overall situation first. As can be seen from the above chart, books App are the most popular track for Chinese overseas companies in 2020. Among the top 100 Chinese overseas applications with material input, there are 26 e-book reading apps. Compared with a large number of companies going out to sea in 2019 to do short video related editing tools app, there is still a big difference.
In a previous online sharing meeting, Facebook’s vice president of Greater China, David, once said that compared with video and other general entertainment tracks, the ROI of Image Text App is easier to correct, which should be the reason why many overseas companies are doing reading apps and buying a lot of traffic.
In addition, compared with last year, a big change is that a large number of online reading apps regard the United States as an important destination for the overseas market. Apart from that, some reading apps made by the Chinese companies go abroad is different from the mainstream that pays as per chapter to read. It adopts the free + advertising cash mode and is classified by Apptopia as one of the vertical communities with the fastest growth in MAU year on year. We will do a detailed interpretation in the next chapter.
Social and entertainment track turn to video, entertainment track is still dominated by big companies
In addition to book reading apps, social and entertainment apps are the most popular ones.
It should be noted here that the boundary between social networking and entertainment is relatively vague, especially for Live Streaming APPs. Here, the author classifies the live app without video chat function into the entertainment category, otherwise, it will be classified into the social category. Because the boundaries are not clear, social and entertainment apps based on video functions are the category with the largest amount of source materials.
Let’s look at social first. There are 25 social apps in the top 100 list, of which 21 have video chat function, and they are all social for strangers, accounting for 84%. Among the 21 social apps, some add live broadcast on the basis of the video social app, while others do the opposite. For example, like Bigo Live, users can chat with strangers in the Live Streaming APPs.
Generally speaking, there are both large and small companies in the social category, but the effects of advertising are different (this will be discussed in detail in the next chapter). But when you go to the entertainment track, you will find that it has basically become the world of big companies.
According to App Growing Global, entertainment accounts for 22 of the top 100 advertising spend. Among them, there are 8 short video apps, 8 live broadcast apps, and 3 long video apps, and the remaining 3 are music-related apps (karaoke + streaming media).
In the 22 Entertainment Apps, 19 came from large companies, accounting for 86%, including each 4 of Kwai and Tencent. It is a relatively large number of App publishers deployed in overseas entertainment track.
Editing, tools, e-commerce, Chinese companies go overseas are deeply rooted in their own tracks
In addition to the above three hot tracks, there are 11 tool apps and 10 e-commerce apps in the top 100 list.
Let’s look at tool apps first.
Among the top 100 tool apps in terms of launch volume, the situation is similar to that of last year. There are five apps that do video or picture editing most.
CapCut, MV Master, and Noizz are Bytedance, Kwai, and JOYY Inc products.
The other two apps, Storychic and Cartoon Photo Editor, have the functions of making Instagram stories and editing pictures respectively. The publishers behind these two apps have been focusing on video and picture editing, which has a good technical foundation.
Among the five apps, Capcut by Bytedance is with the highest download volume. According to the data of Sensor Tower, Capcut was downloaded 12 million times worldwide in October, ranking first in the Google play download list in Indonesia.
It is worth mentioning that Southeast Asia is not the main market for Capcut. According to the data of APP Growing Global, the largest markets for Capcut are Japan, Brazil, and South Korea.
In the past year, Bytedance’s advertising spend in Malaysia and Indonesia were only 8 and 3 respectively. It can be seen that the natural demand for Southeast Asian market users is very large. At the same time, we can also see the overseas markets that Bytedance focuses on this year.
In addition, there are four tool apps that provide wallpaper and facial expressions. Among them, 3D live wallpaper, 4D live wallpaper, and new Emoji 2020 are all from the same manufacturer CY security (according to APP Growing Global, Zero Tech, the developer of 3D and 4D, was the name of CY security before it was renamed). CY Security is a manufacturer from Beijing, which has launched a large number of advertising spend this year. The above three apps are among the top three in terms of the number of advertising spend for the offshore tool app this year. These three products are mainly put on the market in emerging markets, which are realized by advertising.
But in terms of download volume, the performance of the two apps is quite different. According to sensor tower, the number of downloads of 4D live wallpaper in Google Play reached 1 million in October, while the number of downloads of new Emoji’s Google play in October 2020 was only 20000, 50 times of that of the latter.
However, in contrast to the mature market, users have high demand and willingness to pay for facial expression applications. Our previous article “An emoji app that pays little attention to user experience earns $300000 a month” mentioned that Fun Play Stickers, an emoji app that focuses on mature markets, has reached $300000 income in June through subscription.
According to the data of APP Growing Global, there are 10 e-commerce apps in the Top100, including three independent stations, four B2C platforms, two B2B platforms and one shopping platform providing installment payment. We are very familiar with Alibaba’s e-commerce platform and clothing independent station brands such as SHEIN and ROWME, so we will not repeat them here. Let’s talk about the app with more interesting business model.
Fordeal and VOVA are comprehensive B2C e-commerce platforms that have grown rapidly overseas in recent years. Fordeal’s main markets are Saudi Arabia and the United Arab Emirates, and their Android App currently ranks 14th and 30th in the download list of shopping apps in the United Arab Emirates and Saudi Arabia, respectively. According to Fordeal, it doesn’t need more customer service support, such as no commission.
VOVA is a B2C e-commerce platform registered in Hong Kong, China. Its selling point is to sell low-cost products. It is even known as “overseas Pinduoduo”. Its main markets are mature markets in Europe and the United States. In recent years, the top 3 markets with the highest amount of advertising spend are France, Britain, and Germany. According to ecommerceDB, the global sales of VOVA in 2019 is 63 million US dollars, which is not high for an e-commerce platform.
However, in 2020, the epidemic prevention work in mature countries in Europe and the United States is not successful, the penetration rate of e-commerce is rising rapidly, and the e-commerce platforms (such as Wish and some second-hand trading platforms) focusing on sinking markets in Europe and the United States are growing significantly this year. Therefore, the low price strategy of VOVA is in line with the changes in people’s consumption behavior after the outbreak of the epidemic, and VOVA also takes advantage of the situation to increase its purchase in 2020.
The last one is Akulaku, a shopping platform that provides installment service. We are already familiar with Akulaku, a member of the upsurge of financial technology going to Indonesia a few years ago, and one of the only remaining achievements among those Chinese companies who go abroad in this area.
It also received a $100 million strategic investment from Ant financial in 2019, and the data disclosed in the middle of this year is that it has 6 million users. This company set a good precedent for enterprises going abroad. At that time, Akulaku chose a relatively slow way in combination with consumption scenarios, which was different from the cash loan which could be corrected quickly. But the final result was very good.
In 2020, Akulaku is still in the Indonesian market. In the past year, 73% of its advertising spend has been put in Indonesia. After receiving the investment, Akulaku also acquired the digital banking business gradually distributed by BYB, a local private bank in Indonesia.
This year’s epidemic has affected the income level of many people, which has also promoted the development of many platforms providing installment payment services, such as Klanna, which has raised four times this year and is now valued at more than $10 billion.
In addition, education, news, automobile, and travel are in the third echelon. There are two apps in the education category, namely open language by Bytedance and AI English coach by Liulishuo. The open language was launched this year. The top three markets were Hong Kong, Singapore, and Japan. AI English coach was launched last year. The top three countries were Japan, Singapore, and Malaysia (Japan accounted for 94% of the total).
With the launch direction of several large factories, we can also grasp the target market of language learning app to go to sea to a certain extent, which is mainly concentrated in East Asia and Southeast Asia. In addition, we also see that some small factories doing language education have put their overseas markets in Japan.
The two news apps are News Break and Opera News. Among them, NewsBreak is the most popular China overseas app in terms of material input this year, which is nearly 300000 higher than Snake Video, which ranks second.
Finally, the overseas app Yes Auto by Auto Home is mainly launched in Germany and the UK, as well as DiDi’s overseas version DiDi Rider, it’s top three markets, are Australia, Russia, and the United States.
Based on the category, we also see that when choosing their birthplace, the Chinese overseas publishers doing different types of business will also give full consideration to the entrepreneurial atmosphere and talent resources.
From the perspective of application companies, among the top 20 companies in terms of advertising spend, there are 11 companies that make social entertainment apps, accounting for more than half. In addition, the book category is also a category with a great investment this year, with six publishers entering the top 20.
In terms of the city where developers are located, Beijing has the largest number of developers, with eight from Beijing. The 8 developers include the ZhangYue Group, the China Literature Limited, the MICO and Asia Innovations Group Limited that do video chat and video live, as well as Kwai and Bytedance with short video service as its main business, and CY Security of tool class App. On the whole, the publishers in Beijing cover several of the most popular categories launched by the current overseas publishers.
In addition to Beijing, we can see that Guangzhou has good general entertainment and entrepreneurship atmosphere. The top three companies, Bigo and Huya, are all gathered in Guangzhou. In addition, Guangzhou also has a large number of small live broadcasting companies that go out to various markets. Although Hangzhou has no top non-game publishers on the list, editing companies, which account for a large proportion of the top companies in the number of ad spend, gather in Hangzhou.