A day in the life of a Chinese app addict: how the world's biggest O2O/B2C/C2C market works

[AndrewJin]

Last year, Chinese smartphone users downloaded a whopping 185 billion apps, 59% of all downloads worldwide—and that number is only expected to increase this year, thanks to China’s over half a billion (and growing) smartphone users. China surpassed the US this year to become the biggest downloader of iOS apps in the world, according to a report from App Annie(registration required), and while Google is blocked in China, several homegrown Android app stores have sprung up to cater to Chinese customers.

All this downloading means Chinese consumers, and especially the younger ones, are spending huge amounts of their day interacting with apps. Currently, gaming apps remain the most popular app category in China but shopping, video-streaming, and image-and-video apps for social media are catching up quickly. Quartz asked Vivi Chen, a 31-year-old resident of Chongqing, a city in China’s southwest, to detail a typical day’s worth of app usage:

8am: “Bip!” I was woken up by my phone in the morning; it wasn’t an alarm but a message from Sposter! My deliveries had arrived! It’s OK, I will sleep longer and collect them later.

Two hours later I went downstairs to the Sposter lockers, turned on the Sposter app to get the package codes, entered them into the lockers’ computer screen and “bang,” one of the locker doors opens. Wheeeeeeeee…! Thanks to Sposter I don’t have to run to meet the delivery guy to collect my parcels whenever they call me. Instead, when deliveries arrive the guy just needs to put them in the Sposter lockers and I receive a message telling me they’re there; I can go to collect them downstairs from my house any time in the next 48 hours!

Seven parcels arrived today, all ordered from Jingdong (JD.com) a few days earlier. I recently discovered that Jingdong offers a credit service called Baitiao; they gave me 4,500 yuan ($706) in credit that I can spend on whatever I want, and I can repay my bill interest-free any time within 30 days. Or I can spread the payments over anything up to 24 months. F-cking amazing.

With all that credit, I could not help but order stuff from Jingdong; I started ordering a ton of household items, and ended up spending 1,626 yuan. I’ve been short on cash lately so I opted to repay my bill in monthly instalments, which worked out at around 140 yuan per month for the next 12 months. God damn it, the interest (around 60 yuan) is so low I decided not to buy anything with my bank’s credit cards anymore!

“Sposter” delivery boxes.(Quartz/Vivi Chen)

Enter the code sent via an app to unlock your delivered goods.(Quartz/Vivi Chen)

10:30am: Back in my apartment, I tear open all the packages with power and happiness. I install everything around the house and I feel so satisfied.

Next, I open the Jingdong app, click on today’s orders and confirm their receipt. I go back to the Jingdong app’s home page and there are so many offers I start to look around, wondering what I should order next… I should stop doing that; every time I do, I spend at least three hours on the app looking around at the stuff I want, comparing prices, and looking again and again. I think I am addicted to these apps, I even ordered plants from them! God, I am so happy they are still alive!

Noon: A friend messaged me on WeChat to ask if I can help him get involved with the restaurant industry. Actually he wants to build up the Alipay payment service in Chongqing, and hopes to specialize by joining the service to restaurants and bars in the city. I told him that I thought that was a good idea. I remembered the last time I was in a supermarket, I noticed some people using Alipay to buy their groceries.

At the checkout they would open their Alipay app, show the staff their QR code, and let the staff scan it. The money from their Alipay account would transfer directly to the supermarket. I told my friend the restaurant and bar market really needs this kind of service, and arranged to meet later to talk about it. We will meet at Baker Street, a new restaurant that has been open for only a few weeks. I chose Baker Street as I told my friend they might be interested in cooperating, but that he also needs to buy me lunch .

While I’m getting ready to meet my friend I turn on my Uber app and look for a car. Lucky! There’s one just outside my apartment.

2pm: Twenty minutes later I’m in downtown Chongqing, at the restaurant. “Bip!” I get a bill from Uber, only seven yuan!!! (That’s about $1.10) So cheappppppppppp. Uber gave me 10 yuan credit as I failed to find a car last time. Normally, a taxi for the same journey costs about 25 yuan, but if I take an Uber it’s about 16 yuan. Today, it only cost seven yuan! Wow. After using Uber for the first time I decided never to take a taxi again!

2:30pm: My friend arrived at Baker Street and I asked the restaurant’s managers to join us. They agreed that the food and beverage market will begin to use Alipay more and more; when people go out they won’t even need to bring their wallet, they can soon ask for a car and pay for stuff in town just with their phones. Such an arrangement would be more convenient for restaurants too, and it would allow them to avoid fake money issues.

The meeting goes well. My friend got what he wanted, as Baker Street agreed to install an Alipay system. Mission completed.

I travel back home—by Uber, of course.

6pm: By now it’s dinner time but there’s no food in the fridge… Hungry. I want some KFC, but I don’t want to go out. I check my phone. KFC does not have a delivery service! WTF! So I go on Taobao, type in “KFC delivery,” and check the results. Hahahaha…. There is a KFC family set menu on there, for 80 yuan plus 25 yuan delivery. Basically, some people have just set up the service on Taobao, so that if you want to get something and are too lazy to go, they will do it for you! Just need to pay them some money for the service. Great! Thirty minutes later, a guy showed up at my door with KFC.

7pm: Full. Mmmm, but it would be better if there were some sweets or desserts here. Ok, I decide I’ll go out myself and just get an ice cream at the shop. I grabbed a Magnum chocolate ice cream and am about to pay the bill… Shit, i forgot my wallet. I spotted another guy in the shop and walked over to him. “Hi, can I transfer some money from my Alipay or WeChat wallet, as I just want an ice cream, but I forgot to bring my cash?” I look at him with my puppy-dog eyes… “OK!” Thanks a lot. Lol, that was really not expected. I guess my puppy-dog eyes helped.

Back home with my ice cream I chat with my friend on WeChat. I tell him that if he receives hongbao that he shouldn’t share the cash with others, as you can use the money to pay your phone bill, utilities, and for shopping on Jingdong. That’s why I started using Jingdong in the first place. Speak of the devil, I receive a message from Jingdong saying my next orders have been shipped…

Then I get a message from a friend, asking me if he can find an apartment to rent in Jiefangbei (downtown Chongqing), for around 1,500 yuan. I tell him to download the Ganji app! You can find anything!

 

[AndrewJin]

Do u use O2O/B2C/C2C APPs quite often in your daily life?

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With no Google, Chinese app stores soar on high downloads
Chinese demand for smartphones is leading to a surge in app downloads from the country—so much so that five of the leading app stores in the world are now from China.

Apple and Google still run two of the biggest app stores on the planet, but in China local app stores are pulling in billions of downloads, just by targeting the home market, according to Juniper Research.

China itself accounted for 59 percent of all app downloads made last year, which in total reached close to 185 billion. In contrast, the U.S. market only accounted for 8 percent of all app downloads.

During that same period, Chinese search giant Baidu eclipsed Apple to become the world’s second-largest app distributor in terms of downloads, Juniper Research said.

Google Play ranks as the largest app store in the world, but the company has refrained from bringing the platform to mainland China, where it has faced a rocky relationship with the country’s government over online censorship. Last year, China cut access to all Google services.

The absence of Google Play has given Chinese app stores a better chance to thrive, as Android has long reigned as the country’s dominant mobile OS.

Baidu, which runs China’s largest search engine, acquired two local app stores in 2013, helping to make it into a major destination for app downloads.

Chinese security vendor Qihoo 360, which runs its own browser and search engine, ranked as the world’s fourth-largest app distributor, with over 20 billion downloads last year, Juniper Research said. Other top Chinese app stores include one run by Xiaomi, an Android handset maker that rose to become the country’s largest smartphone vendor last year.

Not only is China the world’s largest smartphone market, but consumers in the country tend to devour apps in large numbers.

In China, users will download close to 90 apps every year per smartphone or tablet. That’s far more than the global average, which sits at just 28 app downloads, Juniper Research said.

Demand for apps is only expected to increase in 2015. Juniper Research estimates the total app downloads will reach 236 billion, for close to a 28 percent year-over-year growth. Games are projected be the most popular downloaded apps.

 

[AndrewJin]

THAT'S WHATSAPP
Facebook already has a social network in China—but nobody uses it

Facebook CEO Mark Zuckerberg is willing to go to great lengths to give his company some semblance of a chance in China. Whether it’s learning Chinese, seeking to invest in smartphone maker Xiaomi, or recommending president Xi Jinping’s latest book, Zuckerberg has repeatedly demonstrated his desire to regain access to China’s 600 million-plus internet users, who have been barred from using Facebook since 2009.

In fact, Facebook already owns a social media of sorts that is freely available throughout China: the popular text messaging app WhatsApp. The problem is that WhatsApp has failed to gain any significant market share in China. The reasons why offer an important lesson for Facebook and other western companies trying to gain access to the world’s biggest internet market.

WhatsApp’s most obvious obstacle to gaining a foothold in China is the rival service WeChat, known as Weixin in Chinese. Owned by Tencent, one of China’s two dominant Internet companies along with Alibaba, WeChat has more than 450 million users, mostly based in China. WhatsApp doesn’t break out its user numbers by country, but is estimated to have only about 23 million users on the mainland.

Few Chinese smartphone users have ever heard of WhatsApp, and those who have consider it to be a dinosaur in terms of functionality. As Foreign Policy noted when Facebook bought WhatsApp last year, Chinese users see it as “clearly an outdated product” with an “ugly and simplistic interface.”

What sets WeChat apart from WhatsApp? Both apps started out as text-centric messaging services, but while WhatsApp has stayed mostly true to those minimalist roots, WeChat morphed into a ubiquitous mobile computing platform that can be used to make video calls, share articles, hail a taxi, and send money to friends, among dozens of other functions.

There is also a stark difference when it comes to revenue-generating potential: WhatsApp’s revenue for the first half of 2014 was $15 million; WeChat’s full-year revenue was forecast to be more than $1 billion.

The moral of WhatsApp’s struggles in China may be that even if Zuckerberg and COO Sheryl Sandberg can convince Beijing to unblock Facebook, the company’s prospects in China may be limited. China’s internet market has developed sophisticated preferences of its own, and it now bears little resemblance to the landscape of Chinese clones of western websites that once predominated.

So what is Facebook—which has already signed up many of the world’s internet users outside of China—to do?

The Information reports (paywall) that Facebook is already looking forward to releasing its virtual reality Oculus Rift, a highly-touted virtual reality headset, in China. And there are other options that could position the company to benefit from the Chinese market—including the potential creation of a fund that invests in Chinese companies. The recent negotiations between Facebook and Xiaomi—which according to Reuters were scuttled due to Xiaomi’s fear of political repercussions that might come with a Facebook investment—point in this direction.

Facebook could also partner with a Chinese firm like Baidu—the companies were in talks as recently as 2011, but the deal ultimately foundered, reportedly due to some of the same political concerns that Xiaomi cited. A third, perhaps more difficult option, is to try to learn from the Chinese tech scene.

“We’ve always said that we’re interested in, and are studying and learning about China. We haven’t made any decision on how or if we will enter China,” a Facebook spokeswoman told Quartz.

Opening a Facebook engineering office in Beijing and allowing it to create its own apps, independent of Facebook’s other businesses, might ultimately be the best way for Facebook to finally own something successful in China.