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As the domestic demographic dividend gradually fades, "going overseas" has become an important strategic deployment for Internet companies.
In fact, more than ten years ago, Chinese Internet companies began to explore the way to go overseas.
In 2009, UC officially launched its globalization strategy; in 2010, Jiubang Digital released its first Android tool application "Go Desktop"; in 2011, Cheetah released the tool product "Battery Saver", which together set off the No. wave tide.
A few years later, the craze for tools to go overseas gradually subsided, and a new wave of content went overseas: in 2016, the live broadcast product BIGO LIVE of the BIGO team successfully opened up overseas markets; in 2017, TikTok acquired the musical.ly video application for nearly US$1 billion.
After that, it is the overseas journey of larger-scale game products. Some big game manufacturers such as Tencent and NetEase have successively expanded overseas markets with excellent products.
By 2021, pan-entertainment applications will drive the overall growth of overseas applications and become the main source of income growth for Chinese overseas enterprises. According to App Annie’s data, the top 30 Chinese non-game manufacturers’ overseas application revenue rankings can basically be divided into three major business categories: social & pan-entertainment, tools, and web writing, and social & pan-entertainment revenue accounts for as much as 47%. , at the top of the list.
Source: App Annie Intelligence
Among the overseas companies, ByteDance has the most outstanding performance. In 2021, it will usher in a new milestone in overseas markets. According to the latest data released by the US cloud network security service company, TikTok has replaced Google in 2021 to become the Internet product with the largest traffic in the world. In the overseas short video track, Chinese applications led by TikTok occupy the top positions in various markets. The penetration rate of TikTok in North America is close to 40%, and the penetration rate of Kwai under Kuaishou in Latin America exceeds 20%.
Source: App Annie Intelligence
At present, the global open social networking market is dominated by American and Chinese companies. Well-known American social networking companies include Match Group, Bumble, Spark Networks, etc. Chinese social networking companies are important players in the global open social networking market. Market participants include YY, Yalla , Newborn City, etc., Chinese companies are gradually catching up with overseas companies in terms of market share.
Going overseas often faces risks such as unacceptable conditions and policy control, but the huge dividends of overseas incremental markets still attract Internet companies to continue. At present, the business territory of Internet companies going overseas extends from Southeast Asia and India to the Middle East, Africa, and Latin America, and is sweeping the world.
On the whole, emerging markets and developed markets show different development trends based on regions: users in Europe and the United States are open, direct, privacy-oriented, and willing to pay; Southeast Asia has a strict hierarchical system, respects collectivism, and has a high degree of cultural and religious division. Reject the "one-size-fits-all" market strategy; users in the Middle East are conservative, generous, and have strong social needs; users in Latin America are younger, and the game track is especially hot.
This article will analyze these four markets one by one.
Europe and America
Users pay attention to privacy and are willing to pay
The penetration rate of smart hardware in Europe and the United States is relatively high, and the average daily use time of mobile devices has been relatively long in recent years. The ARPU of products in Europe and the United States can reach US$15. The social entertainment market in North America, Western Europe and other regions is relatively mature, with active users and strong payment capabilities.
European and American users pay more attention to privacy and authenticity. In the evaluation of the application market, many European and American users have mentioned account deletion but information leakage, or questioned the authenticity of platform users. Therefore, some domestic popular robot information routines, European and American users do not Easy to buy. It is more difficult for overseas enterprises to lay out the field where there are already vertical scene giants. North American users have a good habit of exploring new products, and product designs entering the European and American markets tend to be differentiated innovations or layout vertical fields.
Founded in 2016, Castbox focuses on the audio market. It is a platform that allows listeners around the world to listen, produce, and share their favorite audio content. It is the largest third-party podcast platform in the United States.
Castbox has launched Livecast audio broadcast scene as early as 2019. This service is completely free to users. The anchor can create rooms according to different topics. In the same room, the anchor can chat with listeners and fans in real time through mic or instant text chat. For interaction, fans can also buy platform gifts to give to their favorite anchors. By building Livecast, a real-time audio interaction scene, Castbox has successfully shortened the distance between the anchor and the audience, attracting and retaining more users for the platform.
In the vertical field of podcasting, Castbox has already occupied unicorn status. Its experience shows that European and American users are willing to pay for products with better experience, and the success rate of enterprise layout in tracks or vertical markets where giants have not yet appeared is relatively high.
South East Asia
second Chinese market
Southeast Asia is also known as the second Chinese market due to its cultural habits being close to the domestic market. It is a popular area for Chinese mobile applications to go overseas. The main basis for the judgment is "population growth" and "Internet development stage" .
The Southeast Asian market mainly refers to six countries: Indonesia, Thailand, Singapore, Vietnam, Malaysia, and the Philippines. The total population of these six countries is 589 million, accounting for more than 87% of the total population in Southeast Asia. Southeast Asia has a large young population, with an average age of 28.8 years, 9 years younger than China. Taking the Philippines as an example, it is a typical young country, with a median age of only 25.7 years (the figures for China and Japan are 38.4/48.4 respectively).
Source: Google 2021 Southeast Asia Internet Economy Report
The geographical differences in Southeast Asia are relatively large, and the degree of fragmentation in population structure, lifestyle, and religious beliefs is relatively high, and users' consumption habits and behaviors are not the same. The Philippines is a typical country with a masculine dimension. Users like highly functional, efficient, and direct products with high consumption desires; Vietnam respects a culture of restraint, and users prefer practical and routine consumer products; Malaysians like entertainment , Creative and interactive products have a high desire for consumption; Singaporeans like product designs with stories and novel and interesting visual elements; Indonesians are highly receptive to novel and complex affairs and have a high desire for consumption.
The six Southeast Asian countries are collectivist countries, eager to obtain care and recognition from groups or organizations, and usually follow the mainstream values and popularize when choosing products. In addition, the six countries in Southeast Asia have a strict hierarchical system, which emphasizes rights and status. The upper class likes luxury, pays attention to creating a sense of atmosphere and conveying a sense of luxury, and civilian users pay more attention to experience.
In terms of Internet penetration, the growth in Southeast Asia is strong. In 2021, Southeast Asia will add 40 million Internet users, and the overall penetration rate will reach 75%. With the rising spending power of young people, the market will show more potential consumption growth.
Source: Southeast Asia Internet Economy Report 2021
It is worth noting that the local offline entertainment methods are traditional and relatively closed, consumers’ willingness to pay for online social entertainment remains at a high level, and the market has great potential for development. In the real social life of Southeast Asians, family KTV is a relatively popular form of entertainment. They are very interested in online karaoke rooms and voice social products, and are willing to share endorsements. Voice and karaoke social products can meet the social hobbies of local people, so the cost of acquiring customers is lower, and products with good experience can easily gain word of mouth.
StarMaker is a voice social product based on online K-songs and music communities. K-songs serve as a basic function to bring traffic, and use the social relationships accumulated through the entertainment functions of K-songs to complete user retention and monetization. The main monetization channels include advertising and Live rewards. In 2021, Analysys released a report titled "Special Topic on the Development of Chinese Entertainment Social Enterprises Overseas", StarMaker's revenue ranks among the US$100 million club, and its comprehensive revenue and user scale rank second only to "TikTok" and "BIGO LIVE". three.
The key factors for StarMaker's success in overseas market operations are "highly localized operation strategy" and "social + based product design".
First of all, in terms of localization operation strategy, StarMaker has set up local teams in many Southeast Asian countries, deploying music libraries according to the popularity and popularity of local songs, and labeling them with interest tags. At the same time, use algorithms and user portraits to accurately divide users and conduct in-depth operations.
Secondly, in terms of product design, StarMaker pays great attention to social attributes. Although it is a K song-based product, the team considers that singing is a very personal matter and it is difficult to interact with each other . The product has launched live broadcast, chat room and other modes, which fully meet the social needs of young people derived from karaoke. Strangers can not only conduct online discussions and chorus, but also have multi-person pure voice chat interaction in the same room, so as to attract and retain more overseas users.
the Middle East
With money and leisure, Muslim users are the key group
The Middle East market is highly concerned by overseas companies due to its "potential" and "speciality".
The "potential" here mainly refers to the potential energy of the six Gulf countries in the Middle East and Turkey in terms of infrastructure, users and consumption capacity. According to Hootsuite data, in 2020, 71% of Middle Eastern users will access the Internet through 3G/4G, and the mobile Internet penetration rate will reach 90%, of which 64% are smartphones (80.6% in the United Arab Emirates), ranking among the highest in the world.
Source: Hootsuite2020.1 Internet penetration rate of major countries in the Middle East
In the Middle East, the main markets of the United Arab Emirates and Saudi Arabia have a per capita GDP of more than 40,000 US dollars and 20,000 US dollars, respectively, and Qatar's per capita GDP even reached 70,000 US dollars. Coupled with factors such as culture and religion, offline entertainment is restricted, which has led to a substantial increase in the online social demand of local Internet users. Users in Saudi Arabia, the United Arab Emirates, Egypt and other countries spend nearly 8 hours online, much higher than those in Southeast Asia and even the Chinese market.
However, in such a huge blue ocean that seems to be "rich and free", many Internet platforms that have launched social applications in the Middle East have collapsed. The main reason is that the market is "special".
Middle Eastern countries have a strong religious atmosphere, and Islamic culture has penetrated into every aspect of people's daily lives. Internet products are also one of the online scenarios that the religious police in the Middle East will pay attention to. The religious police will punish users who transgress or violate religious regulations.
Therefore, in the Middle East market, Muslim users are a key user group different from other markets, and all operations must be based on this special user group. The three main markets for Chinese developers in the Middle East are Saudi Arabia, the United Arab Emirates, and Turkey. Iraq is expected to become the next blue ocean market in the Middle East, and the development of e-commerce and mobile electronics is booming. China's social networking companies have been deployed one after another, with outstanding results and no ceiling yet.
In the field of shopping applications, shopping on social platforms in Iraq is extremely active due to the combined influence of factors such as local purchasing power and purchasing demand, the surge in network coverage and the formation of online shopping habits, no special taxes, and the lack of large shopping platforms. The top three most downloaded shopping apps in Iraq are all Chinese e-commerce brands: Fordeal, SheIn, and Alibaba.
In the field of communications, following Huawei's establishment of a local terminal team in Iraq in 2013, well-known domestic brands such as OPPO, Meizu, and Xiaomi have appeared in the Iraqi market in the past two years.
In the context of the accelerated pace of China's manufacturing going overseas, in September 2021, a new state-owned enterprise with assets of nearly 120 billion established by China Xidian and Pingao Power Equipment Group began to deploy the Middle East market.
In addition, the social applications in the Iraqi market also performed relatively well. According to the data monitoring of iGoo, the products HELLO YO and Lamour, which provide real-time interactive technology, ranked second and third in the ranking of social applications.
Yalla Group is known as the "Middle East Little Tencent". Unlike other overseas companies that set up local operation teams, Yalla Group has a localized team since its inception. Its founding team has many years of work experience in the Middle East. Deep cultural understanding. At the product level, Yalla, a voice chat product, was positioned as a voice chat room model from the very beginning, which is to bring the traditional majlis (parliament) in the Middle East online, and it has localized genes since its birth.
Yalla Ludo, its card and board game social product, is based on the voice technology provided by Instant Technology, and connects users with common hobbies through the two games of flying chess and dominoes, and is very popular among local residents in the Middle East. Secondly, in many details, such as the design of game buttons, since the thumbs of Middle Eastern users are usually 1.5 to 2 times larger than those of Chinese people, the number of invalid clicks will increase according to the size of Chinese fingers, resulting in poor user experience. The Yalla Group team is well versed in this and has made multiple adjustments to every detail to ensure the best experience for users.
Latin America
Users spend the most on entertainment, especially the game track
The digital landscape in Latin America is developing rapidly, and the market potential is huge. It is expected that by 2025, the proportion of the population using a smartphone will increase to approximately 75%. In the first half of 2021, Latin American countries will spend more time using Android phones per day than the US, with users spending an average of 4.2 hours on their mobile devices.
Source: App Annie Intelligence
The Internet audience in Latin America is very young. Population data in 2021 shows that the average age of Internet audiences in Brazil is 33 years old, which is 5 years younger than the average age in the United States. Generation Z users will become the main consumers in the Latin American market in the future. In terms of smartphone usage, mobile users spent more than 25.9 billion hours in social applications, the most among all applications.
In terms of spending, Latin American users are more inclined to games, photos and videos, and entertainment categories. Entertainment has become the category with the highest spending by users in Latin America, and the game track is particularly hot. Mexico is the largest game market in Latin America, with a scale of US$1.418 billion. The popular domestic games are mainly popular in Europe and the United States. The strength of local game manufacturers is relatively weak, and many international game manufacturers are vying for hegemony. Among Chinese overseas manufacturers, FunPlus, IGG, Long Tech Network, Tencent, and NetEase all performed well.
Source: App Annie Intelligence
In recent years, the development of Internet technology, the dissemination of business models, and the influx of capital have driven a large number of start-ups in the Latin American market. There are not only local financial technology, but also Chinese companies such as Tiktok, Didi, and Kuaishou.
To sum up, in developing countries such as the Middle East, Southeast Asia, and South Asia, the market has a lot of room to be discovered, and the cost of customer acquisition is lower than that of developed markets. In the initial stage of market expansion for overseas companies, the cost of exploring the same business model in developing countries is lower. When the model becomes more mature, it is more likely to be successful if it is migrated from a developing market to a developed market.
The new era of navigation has arrived, and China must be an important member of the world's business landscape, that is, to provide real-time interactive technical services from the dimensions of global node coverage, weak network transmission optimization, mid- and low-end model optimization, and sound quality 3A processing (that is, real- time audio and video services ). In addition, instant ultra-low latency technology can solve the full link optimization of audio and video processing, and at the same time combine the precise synchronization mechanism and framework optimization to achieve ultra-low latency and synchronization below 70ms (click here ) . The ultimate and stable technology and service are the eternal pursuit of Jigou Technology. In the future, Jigou will continue to escort enterprises on their overseas journeys.
Source: Jigou Research Institute
business analyst agneswang