Amazon launched its app store in China last weekend, becoming the first Western company to offer both free and paid Android apps to consumers in the world’s largest smartphone market. Google Play, which is also available in China, carries only free content. The app store’s establishment came as a surprise to many, as China was noticeably absent from the Amazon Appstore expansion roadmap made public by the Seattle tech giant just last month.
The creation of the Appstore, which will offer apps produced by both foreign firms and domestic Chinese mobile Internet behemoths like Tencent and Sina, is significant for two reasons: 1) it will likely serve as the red carpet for the Kindle’s impending rollout; and 2) it offers new opportunities both for Chinese consumers to acquire quality apps and for app producers, foreign ones in particular, to monetize their product in the Chinese market.
Speculation regarding the arrival of Amazon’s Kindle devices on the Chinese mainland dates back to 2010. In the last six months alone, reports have emerged several times that the Kindle was about to go on sale. In November, several Chinese news publications stated that the Kindle would be released within the month. In December, the launch of the Kindle Store further heightened speculation that the Kindle was about to enter the Chinese market. More recently, April 16 and then May 1 were cited as likely Kindle launch dates. The Kindle has yet to be released. But it soon will be, according to a bevy of industry analysts. Steven Millward of Tech in Asia writes that Amazon has “leapt the final hurdle in its long pursuit of selling it own hardware in China.” First Financial and China Daily are among the other publications that expect the Kindle to go on sale in the Chinese market soon.
Despite the fact that it has yet to be sold in China, questions have already been raised about the Kindle’s prospects for success in the world’s biggest market. Many wonder if Amazon may be late to the e-reader party. As contextChina’s Ye Jiang noted in a recent column, China already features numerous established e-readers, including those produced by Dangdang, 360Buy, Hanwang Technology, and Shanda Cloudary. The Kindle’s future with Chinese consumers is further clouded by the fact that Amazon’s international success has not translated into dominance in China – its share of the Chinese e-commerce market is less than one percent. Can the Kindle reverse Amazon’s fortunes in the Middle Kingdom? Possibly. Company executives recently revealed that the Kindle Paperwhite is Amazon’s best selling product globally, a fact which should offer them some confidence as they prepare to release the e-reader in China.
Regardless of whether the Amazon Appstore turns out to be a harbinger of the Kindle’s release in China, its establishment is an important development on its own account. Consider: a) smartphone use is surging in China, which recently surpassed the U.S. as home to the world’s largest smartphone market; b) the vast majority of smartphones in use across the country operate on Android; and c) Amazon’s Appstore is the first Western app store to sell Android apps – the Google Play store supports only free apps in the Chinese market. All of this evidence suggests that the launch of Amazon’s Appstore in China capitalizes on current market trends and opportunities.
That being said, Amazon’s Appstore is hardly the only player in the Android app store game in China – there are estimated to be over 500 currently in existence. How can Amazon rise to the top of the pile? The Appstore appears to have two distinct advantages over its competitors.
1) Quality. As Lisa Hanton, managing partner and founder of the research firm Niko Partners notes, “One of Amazon’s benefits to Chinese mobile app consumers will be that it will likely employ a system to provide quality apps.” Amazon’s strict quality control measures could resonate with China’s consumers as malware infected apps, pirated apps, and apps that secretly steal private user data are currently rampant in the Chinese market.
2) Content. Android app developers, in particular foreign Android app developers, are likely to be drawn to Amazon’s AppStore as an efficient and reliable way to penetrate the Chinese market. The alternatives – existing Chinese Android app stores – can be difficult for foreign app developers to navigate. Among the challenges these app developers currently face are language barriers and challenges related to payment processes and product localization. Indeed, the process can be so complex that there are companies that focus exclusively on helping foreign app developers list their product in China. The Amazon Appstore, on the other hand, will prove a familiar commodity – it is currently available in many developed countries and will soon be active in nearly 200 countries around the world – and one with which foreign app developers can easily interface. With the popularity of foreign games and other foreign apps surging in China, Amazon’s Appstore stands to both attract Chinese consumers interested in these international products and help smooth the process by which foreign Android app developers who are new to the Chinese market monetize their product.
The success of Amazon’s Appstore and, if released, the company’s line of Kindle products, is hardly assured in the fast moving and heavily fragmented Chinese e-reader and digital content market. Nevertheless, the Seattle tech giant’s latest moves in the Chinese market – the December launch of the Kindle Store in China, the mid-April release of the company’s personal cloud drive services, and the recent establishment of the Appstore – all indicate that Amazon remains firmly committed to succeeding in the country. Chinese Internet mogul Kai-Fu Lee may be right in stating that Amazon is “losing” in China, but its executives, who continue to roll out the company’s diverse array of services, certainly don’t seem to think the battle for the hearts and minds of the Chinese consumer is over.
Editor’s Note: contextChina is a Seattle-based media company following the growing impact of China on the Pacific Northwest across business, technology and policy. You can follow contextChina on Twitter @contextchina.