Image source @ Visual China
Text | ZEGO is a technology watch
The mouth dividend has gradually faded, and "going to sea" has become an important strategic deployment of Internet companies.
In fact, more than a decade ago, Chinese Internet companies began to explore the road to the sea.
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 first wave of China's Internet going to sea.
A few years later, the boom in tools to go global gradually subsided, and a new wave of content went overseas: in 2016, BIGO team's live broadcast product BIGO LIVE successfully opened up overseas markets; in 2017, TikTok acquired musical.ly video applications for nearly $1 billion.
After that, it is the journey of larger-scale game products to the sea. Some large game manufacturers such as Tencent and NetEase have successively expanded overseas markets with excellent products.
By 2021, pan-entertainment applications have driven the overall growth of overseas applications and become the main source of revenue growth for Chinese overseas enterprises. According to App Annie data, the manufacturers in the top 30 of China's non-game manufacturers' overseas application revenue list can basically be divided into three major business categories: social & pan-entertainment, tools and online text, and the revenue of social & pan-entertainment accounts for up to 47%, ranking first.
Source: App Annie Intelligence
Among the overseas enterprises, the most eye-catching performance is ByteDance, which will usher in a new milestone in overseas markets in 2021. The latest data released by the American cloud network security service company shows that in 2021, TikTok has replaced Google as the world's most trafficked Internet product. Overseas short video tracks, Chinese applications led by TikTok occupy the top spot in various markets. TikTok's penetration rate in North America is close to 40%, and Kuaishou's Kwai has a penetration rate of more than 20% in Latin America.
At present, the global open social market is dominated by American and Chinese enterprises, well-known American social companies include Match Group, Bumble, Spark Networks, etc. Chinese social enterprises are important players in global open social networking, market participants include Happy Times, Yalla, Naked City, etc. Chinese companies are gradually catching up with overseas companies in terms of market share.
Going to sea often faces risks such as water and soil dissatisfaction and policy control, but the huge dividends of overseas incremental markets still attract Internet companies to follow. At present, the commercial territory of Internet companies extending from Southeast Asia and India to the Middle East, Africa and Latin America is sweeping the world.
Overall, emerging markets and developed markets show different development trends in terms of geography: users in Europe and the United States are open, direct, pay attention to privacy, and have a strong willingness to pay; Southeast Asia has a strict hierarchy, promotes collectivism, has a high degree of cultural and religious separation, and users reject the "golden oil" market strategy; users in the Middle East are conservative, generous, and have strong social needs; Latin America users are younger, and the game track is particularly hot.
This article will analyze each of these four markets.
Europe and the United States: Users pay attention to privacy and have a strong willingness to pay
The penetration rate of smart hardware in Europe and the United States is high, and the average daily use time of mobile devices in recent years is longer, and the ARPU of products in Europe and the United States can reach 15 US dollars. The social entertainment market in North America, Western Europe and other regions has a high maturity, active users and strong ability to pay.
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 question the authenticity of platform users, so some domestic popular robot information routines, European and American users are not easy to buy. The layout of the vertical scene of the giant field is more difficult for overseas enterprises, North American users have good new product exploration habits, into the European and American market product design trend to differentiated innovation or layout vertical field.
Founded in 2016, Castbox focuses on the audio market and is the largest third-party podcasting platform in the United States that allows listeners around the world to listen, produce, and share audio content they love.
Castbox has launched the Livecast audio live broadcast scene as early as 2019, the service is completely free for users, the anchor can create a room according to different topics, in the same room, the anchor can interact with the listeners and fans in real time through the form of continuous microphone or instant text chat, and fans can also purchase platform gifts to give to the desired anchor. By building Livecast, a real-time audio interactive scene, Castbox has successfully narrowed the distance between anchors and listeners, attracting and retaining more users for the platform.
In the vertical of podcasts, Castbox has occupied the position of a unicorn. Its experience shows that European and American users are willing to pay for products with better experience, and the success rate of tracks or vertical markets that have not yet appeared in corporate layout giants is relatively high.
Southeast Asia: The second Chinese market
Due to the proximity of cultural habits to the domestic market, Southeast Asia is also known as the second Chinese market, which is a popular area for Chinese mobile applications to go overseas, and its judgment is mainly based on "population growth" and "Internet development stage".
The Southeast Asian market mainly refers to Indonesia, Thailand, Singapore, Vietnam, Malaysia, the Philippines these six countries, the total population of these six countries is 589 million, accounting for more than 87% of the total population of Southeast Asia. Southeast Asia has a large young population, with an average age of 28.8 years, 9 years younger than China. In the case of the Philippines, for example, it is a typically younger country with a median national age of only 25.7 years (China/Japan this data is 38.4/48.4 years old, respectively).
Source: Google's 2021 Southeast Asia Internet Economy Report
Southeast Asia has large regional differences, a high degree of fragmentation of population structure, lifestyle, and religious beliefs, and different user consumption habits and behaviors. The Philippines is a typical masculine dimension country, users like functional, efficient, more direct products, high consumer desire; Vietnam advocates a restrained culture, users prefer practical, conventional consumer products; Malaysians like entertainment, creativity, high interactive products, high consumer desire; Singaporeans like story product design, novel and interesting visual elements; Indonesians have a high acceptance of fresh and complex matters, high consumer desire.
The six southeast Asian countries are collectivist countries, eager to receive care and recognition from groups or organizations, and often follow the mainstream values when choosing products, democratizing. In addition, the six southeast Asian countries have a strict hierarchy, attaching importance to rights and status, the upper class likes to be gorgeous, pay attention to creating a sense of atmosphere, convey a gorgeous visual sense, and civilian users pay more attention to experience.
At the level of Internet penetration, Southeast Asia has grown strongly, with 40 million new Internet users in Southeast Asia in 2021, with an overall penetration rate of 75%. As the spending power of young people rises, the market will also show more potential consumption growth.
Source: 2021 Southeast Asia Internet Economy Report
It is worth noting that the local offline entertainment methods are traditional and relatively closed, and consumers' willingness to pay for online social entertainment remains at a high level, and the market development potential is large. In the real social life of Southeast Asians, family KTV is a popular way of entertainment, they are very interested in online K song rooms, voice social products, and are willing to share endorsements. Voice, K song social products can meet the social hobbies of locals, so the cost of customer acquisition is lower, and the products that experience well are easy to get word-of-mouth dissemination.
StarMaker is a voice social product based on online K song and music community, K song as a basic function to bring traffic, the use of K song entertainment function precipitated social relationship to complete user retention and monetization, the main monetization channels include advertising and live tipping. In the 2021 Analysys report on the development of China's entertainment social enterprises abroad, StarMaker's revenue ranked among the 100 million dollar club, ranking third in terms of comprehensive revenue and user scale, second only to "TikTok" and "BIGO LIVE".
The key factors to StarMaker's success in operating in overseas markets are the "highly localized operational 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 a good song library according to the popularity and singing degree of local songs, and labeling them with interests. At the same time, algorithms and user portraits are used to accurately divide and operate users in depth.
Secondly, at the product design level, StarMaker attaches great importance to social attributes, although it is a product based on K songs, but the team considers that singing is a very private thing, it is difficult to interact, so it works with instant technology to launch live broadcasts, chat rooms and other modes in the product, which fully meets the social needs of young people derived from K songs. Strangers can not only conduct online discussions, choruses, and multi-person voice-only chat interaction in the same room, so as to attract and retain more overseas users.
Middle East: With money and leisure, Muslim users are a key group
The Middle East market, due to its "potential" and "special", has received great attention from overseas enterprises.
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 accessed the Internet through 3G/4G, and the mobile Internet penetration rate reached a maximum of 90%, of which 64% were smartphones (80.6% in the UAE), ranking among the top in the world.
Source: Hootsuite2020.1 Internet penetration in major countries in the Middle East
In the Middle East, the per capita GDP of the United Arab Emirates and Saudi Arabia in the main markets exceeded 40,000 and 20,000 US dollars respectively, and qatar's per capita GDP was even as high as 70,000 US dollars at one point. Coupled with cultural and religious factors, offline entertainment is constrained, resulting in a substantial increase in the online social demand of local Internet users, saudi arabia, the United Arab Emirates, Egypt and other countries of the user online time is close to 8 hours, much higher than Southeast Asia and even the Chinese market.
However, in such a huge blue ocean that seems to have "money and leisure", many Internet platforms that have landed social applications in the Middle East have collapsed into the sand, mainly because of the "specialness" of the market.
The middle eastern countries have a strong religious atmosphere, and Islamic culture permeates all aspects of people's daily lives. Internet products are also one of the online scenarios that the Religious Police of the Middle East will pay attention to, and the Religious Police will punish users who exceed or violate religious rules.
Therefore, in the Middle East market, Muslim users are a key user group that distinguishes them from other markets, and all operational actions should 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 electronic tracks is booming. Chinese social overseas enterprises have successively laid out among them, with eye-catching results and no ceiling yet appearing.
In the field of shopping applications, social platform shopping in Iraq is extremely active due to the combined influence of local purchasing power and purchase demand, the surge in network coverage and the formation of online shopping habits, the absence of special taxes, and the lack of large shopping platforms. The top three shopping apps in Iraq for download are all Chinese overseas e-commerce brands: Fordeal, SheIn, and Alibaba.
In the field of communications, following Huawei's local terminal team in Iraq since 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 acceleration of China's manufacturing to the sea, in September 2021, the new central enterprises with assets of nearly 120 billion yuan established by China Xidian and Pinggao Electric Power Equipment Group began to lay out the Middle East market.
In addition, the social applications in the Iraqi market also have a relatively good performance, according to the monitoring of the immediate data, the products hello YO and Lamour that provide real-time interactive technology by the immediate structure rank second and third in the social application rankings.
Yalla Group is known as the "Middle East Small Tencent", unlike other overseas companies to set up local operation teams, Yalla Group has a local team since its birth, and its founding team has many years of work experience in the Middle East and has a deep understanding of the culture of the Middle East. At the product level, in the case of Yalla, a voice chat product, from the very beginning, it has been positioned as a voice chat room model, which is to online the traditional majlis (parliament) in the Middle East, and has a localization gene since its birth.
Its board game social product Yalla Ludo, on the basis of the voice technology provided by instant technology, links users with common hobbies through two games, Flying Chess and Domino, and is well received by local residents in the Middle East. Secondly, in many details, such as the design of game buttons, because the thumbs of Users in the Middle East are usually 1.5 to 2 times larger than Chinese, according to the size of the finger Chinese, the number of invalid clicks will increase, resulting in a poor user experience. The team at Yalla Group understands this and makes multiple adjustments to every detail to ensure the best possible experience for the user.
Latin America: Users spend the most on entertainment, and the gaming track is particularly hot
The digital landscape in Latin America is developing rapidly and has great market potential. The proportion of the population using smartphones is expected to increase to about 75% by 2025. In the first half of 2021, Android phones in Latin American countries exceeded the daily use of Android phones in the United States, with users spending an average of 4.2 hours on mobile devices.
The Internet audience in Latin America is very young, and the 2021 population data shows that the average age of the Internet audience in Brazil is 33 years old, 5 years lower than the average age in the United States, and Gen Z users will become the future consumption force of the Latin American market. Mobile users spend more than 25.9 billion hours in social apps, the first of all smartphones.
In terms of spending, Latin American users are more inclined to games, photos and videos, and entertainment has become the highest spending category for users in Latin America, and the game track is particularly hot. Mexico is the largest gaming market in Latin America, with a size of $1.418 billion. The domestic popular games are mainly popular in Europe and the United States, the strength of local game manufacturers is weak, and many international game manufacturers compete for hegemony. Among Chinese overseas manufacturers, FunPlus, IGG, Long Tech Network, Tencent and NetEase have performed well.
In recent years, the development of Internet technology and the spread of business models and the influx of capital have driven the Latin American market to give birth to a large number of start-ups, both local financial technology and Chinese companies such as Tiktok, Didi, and Kuaishou.
In summary, developing countries such as the Middle East, Southeast Asia, and South Asia have a large space to be tapped in the market, and the cost of customer acquisition is lower than that of developed markets. In the early stage of overseas enterprises expanding their markets, the same business model is cheaper to explore in developing countries, and when the model is further matured, it is copied from the developing market to the developed market, and the probability of success is higher.
The new maritime era has arrived, and China must be an important member of the world's commercial map, that is, to provide real-time interactive technical services from the dimensions of global node coverage, weak network transmission optimization, low-end model optimization, and sound quality 3A processing. In addition, the ultra-low latency technology can solve the full-link optimization of audio and video processing, and at the same time combine the precision synchronization mechanism and framework tuning to achieve ultra-low latency and synchronization below 70ms. The ultimate and stable technology and service is the eternal pursuit of instant technology, and in the future, even if it is constructed, it will continue to escort the enterprise on its journey to the sea.