Free, localization key to China breakthrough

Free, localization key to China breakthrough

Summary: Software companies and app developers looking to make mark in China should pay attention to content localization and adopt "use first, pay later" strategy, observers say.

SHARE:

Paid software and applications may be increasingly prevalent in China but to have a shot at success, Western software companies and developers need to exercise flexibility in pricing and understand popular culture and trends to ensure content is optimally localized, industry watchers suggested.

According to Irene Yu, business analyst at China Market Research (CMR), there is "definitely" a market for paid software as demand continues to grow. However, she highlighted two aspects software companies and developers need to consider in order to grow their businesses there: new payment models and localization.

Yu noted that while Chinese users are willing to pay for content, they have a "strong preference" for downloading a free version of the software first and pay for in-app upgrades later. This purchasing behavior is shaped by the "prevalence of free or 'cracked' software in China" as well as how users like to judge the quality of the product before spending money to purchase the full version of the software, the analyst explained.

Kun Liu, country manager of China for PopCap Games, agreed with Yu's observation. He said that the Chinese market is "very competitive" and to succeed, companies require "mastery of online, free-to-play business models". Such business strategies are now becoming more important, he added.

The casual games developer had in May announced that it would be partnering RenRen.com to bring its Plants vs. Zombies Social Edition onto the Chinese social-networking platform. The online game, which shot to fame when it launched on Apple's iOS platform, was adapted by PopCap's Shanghai studio and includes "a host of new content such as new game modes as well as personalization and social features", the company stated in its press statement then.

A separate PCWorld report also revealed that the collaboration with RenRen will create a new business model for PopCap.

While the game is free on the site, Plants vs. Zombies users will be able to buy virtual goods, which provide another revenue stream for PopCap, PCWorld said in the article.

The U.S.-based game developer will also look to recoup some of the revenue lost to piracy, the report stated. PopCap CEO David Roberts had noted that its biggest user base for Plants vs. Zombies resides in China even though the game was originally created as an English title. He told PCWorld in May that the game has been downloaded 100 million times, but most of the downloads were free, bootleg versions.

Software giant Microsoft faces similar piracy challenges. According to a Wall Street Journal report last week, Redmond's CEO Steve Ballmer said rampant piracy would likely result in the company's China revenue amounting to about 5 percent of what it will receive in the United States even though PC sales in the two countries are almost on par. Its total revenue from China which has a population base of 1.3 billion people is also less than that of the Netherlands, a country with a population of under 17 million, the Journal said.

According to latest figures from the Business Software Alliance (BSA), 60 percent of PCs in the Asia-Pacific region had pirated software installed in 2010, with the commercial value of these programs hitting US$18.7 billion.

Tap popular trends
On localizing content to suit the Chinese market, CMR's Yu said language translation is "very important" if developers are porting applications or software over.

"Simple translation isn't enough. It is important to translate story lines [for software such as games] into Chinese but also to make sure these concepts and story lines [are aligned to] popular trends," she elaborated.

Furthermore, she said that the way Chinese consumers interact online is different from how users behave in markets such as U.S., for example. While Chinese Web users are very willing to share their opinions and experience of a specific product or brand, they are more reticent with regard to disclosing personal information, Yu pointed out.

Software companies with an interest in the country, added PopCap's Liu, will need to adjust and adapt business practices in order to navigate the "dynamic", competitive Chinese market.

Topics: IT Employment, Apps, Legal, Software

Kevin Kwang

About Kevin Kwang

A Singapore-based freelance IT writer, Kevin made the move from custom publishing focusing on travel and lifestyle to the ever-changing, jargon-filled world of IT and biz tech reporting, and considered this somewhat a leap of faith. Since then, he has covered a myriad of beats including security, mobile communications, and cloud computing.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

0 comments
Log in or register to start the discussion