Chinese smartphone users' price sensitivity an obstacle to monetization

Amid a boom in smartphones, the unwillingness to pay for apps makes it a challenging opportunity but locking in these users now may pay off in the long run.

Among the 179 minutes that smartphone users in Mainland China spent on their mobile devices, 109 of those minutes were spent on entertainment such as games, casual reading, videos, music, and chatting on Instant Messaging (IM) apps, according to a study done by the China Internet Network Information Center (CNNIC).

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The huge customer base , of about 468 million smartphone users, with a strong reluctance to pay presents both opportunities and challenges to service providers and product developers. However, it may be hard to monetize this growth because of the users' short product focus span.

During the last 18 months, 39.3 percent of them said they only spend two weeks on one game before they moved on to the next, while only 26.9 percent paid for contents, whereas 27.4 percent paid for games, 20 percent for e-books, and only 5.6 percent for music.

Chinese Internet giant Tencent thas been testing the waters to monetize the trend by integrating games to its popular chat platforms WeChat and QQ to gain marketshare. WeChat and QQ have already attracted 149 million game players.

The fast expansion of the country’s 3G and 4G networks and the growing number of free Wi-Fi hotspots, mean mobile gaming and video watching have a lot of room for growth and it may be a good idea to lock in the user base now.


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