The Rise and Fall of Foreign Apps

Despite its low profile， Facebook still piqued people’s curiosity and interest by renting an office in the CBD of Beijing. The Fortune Center， which accommodates Facebook’s Beijing office， is located in the central part of Eastern Third Ring Area. China World Trade Center Tower 3， the most expensive office building in Beijing， is just standing next to it.

Few Internet companies set up their offices in this area. Most of the Chinese local IT companies choose to stand in the northwestern and northeastern corners of Beijing. Now Facebook broke up this tradition by renting an 800-sqm office on the 59th floor of this building. DTZ is the agency that facilitates this deal.

In the commercial lease market， the property owners will leave proper places for important clients for their future development and expansion. The Fortune Center has no plan to lease the rest of 58th floor to other clients. Facebook is the only client on this floor which covers 2900 square meters in total.

Even though most Chinese people could not get access to the services of Facebook， this company has already begun to take actions in the Chinese market. However， Instagram， a picturesharing social app under Facebook， strangely disappeared from the Chinese market.

As of the beginning of May， the major third-party Android app suppliers like Baidu App and Peasecod has removed Instagram from their search results. For this， these suppliers could not give out a definite reply. “We cannot say anything or make any comments，”says a PR director of one of the aforementioned companies. The marketing director of a lesser App supplier says that they actively removed Instagram“for the safety concerns”.

“Instagram will not be gone. We will work with Facebook to develop Instagram together. We are going to develop new functions and create better experiences of sharing pictures for the users，” said Kevin Systrom in April 2012 when Instagram was acquired by Facebook. He might not foresee that this App， which has recruited over 200 million users worldwide， will disappear in the Chinese market.

Instagram is gone while other Apps in China met “functional problems”.

Jia Yin is an App lover in China. He usually turns on his Line once every two days. On June 11， when he was going to add a new friend in his contact list， he could not find any contact in the search column. Feeling strange， he used the VPN and immediately found the right contact. “Now I know that this App was blocked in China just like Facebook”.

Like WeChat， Line is also an instant communication app which owns a lot of users. It was launched in June 2011 by the Japanese subsidiary company of Korea-based NHN Corporation and has a lot of users in Japan and Southeast Asia. On April 2， 2014， the company announced that the number of its users had surpassed 400 million. Apart from a lot of ordinary users， many starts in Japan， Taiwan， Hong Kong and South Korea used Line as a platform to communicate with their fans. Some commercial companies also consider it an important tool to contact the consumers.

Jia Yin is a veteran user of Line. As an editor-in-chief in a column of Tecent， he once spent a long time working in Hong Kong. Since local friends were using Line， he also used this App to communicate with them. After returning to Beijing， he increased the frequency of using WeChat， but still relied on Line to talk with friends that do not use WeChat. He says that some Japanese friends object using WeChat， so he kept using Line in spite of being less frequent till he found it functionally broken.

The official site of Line has confirmed that the product had met problems in China. “On July 1， the Line has met problems in the link to the Internet in China， which also rendered other services inaccessible. We are investigating into this issue and trying to work out a solution，” reports NHN Japan， the company that runs Line. However， the solution has not come out by the end of August.

After the functional problem of Line， Jia Yin planned to use other communication tools to talk with foreign friends. It is not until then did he find that Line is not the only App that has met problems. “Talkbox， which is frequently used in Hong Kong， and several instant communication tools of Google， are also blocked here，” Jia Yin says.

These dysfunctional Apps are all instant communication and social tools. They are developed by foreign companies and have their servers located overseas.

In the office of Facebook in Fortune Center， people could see the Tiananmen Square in the west on a sunny day. That place is considered to be the symbol of political power in China. At the foot of the high-rise is the jammed and busy Eastern Third Ring Road， which stands for the potential of this market. No Internet companies would say no if they were able to set up offices there， but they must meet the requirements of the government.

Facebook is still unable to bring its services to China， but giving up this market is never in its plan.

When it was denied an access to the Chinese market in 2009， it set up an office in Hong Kong to support its ads sales and services for developers in mainland China. The senior executives of Facebook paid frequent visits to the southwestern region of China and the site of Facebook also displayed the ads of tourism in Chengdu delivered by the Chengdu government. It is not a rare case for the Chinese companies to deliver ads on Facebook through its specially-assigned agencies in China.

Those Chinese agencies which want to attract overseas clients also know the advantages of Facebook. According the data from network traffic monitor comScore， Facebook has the largest data traffic among all websites in the world. Therefore it owns a great value for advertising. In addition to that， there are thousands of App developers that rely on Facebook. Therefore， it is necessary for this company to set up an office in China for the convenience of communicating with them.

But it is not an easy task to gain a bit progress in this market. As reported by Bloomberg， Facebook has not decided to employ full-time workers in this office. If it plans to do so， it needs to have the legal business license. However， a source close to Facebook says that the company already submitted the application for the business license to the Chinese administrative body in May， but has not got the reply.

Let’s shift the topic back to Line. This App used the cute animated tags to attract the users and kept trying to expand its own influence in the market. In China， the Android version of Line began its distribution through 360 App Store. When it faces the rising stress of its competitor WeChat， it turns to Peasecod as its major operator in China. In addition， it spared no expenditure in delivering ads in the metro stations of Shanghai. It also worked with Japanese fashion brand Uniqlo to launch the branded T-shirt， which was quite popular in the first half of this year.

This should be a golden opportunity for Line to expand its market share in China， but the unexpected and haunting dysfunction has almost broken this dream.

For the Internet companies， China is always a market full of attractions. According to the data from China Internet Network Information Center， the number of Internet users in China had reached 618 million by the end of 2013， and there are 500 million mobile Internet users in this country. However， this market is full of “unexpected factors” which could easily lead to the chain reaction in the market.

No matter in which countries， the compliance with the governmental rules and requirements is a smart business strategy. Presently， Instagram is still available in Apple’s App Store in China.“We have strict examination and review system for the Apps. There specially-assigned teams to take charge of that thing，” says a PR director of Apple. The contents subject to their reviews include pornography， religious culture and racism.

These Android App suppliers in China are more “vulnerable” to the review. This is because Google Play， the biggest and global mainstream Android App supplier， is not allowed in China. In the Chinese market， the Android Apps come from several suppliers. The decentralization of the App suppliers and distributors made it hard to work out a unified rule for the management， leading to the problems of Android Apps in China.

The “globalization of information” is the key feature of the App market. That requires an App to be able to be downloaded across the world. In another word， the Chinese developers should be able to bring their Apps and services to the market and the inverse course should be available for foreign developers. When Facebook， Instagram and Line are trying to get into or expand their market share in China， Chinese Internet companies never give up their plans to go overseas， no matter they are big companies like Tecent， Baidu and Alibaba， or small and special developers.

Luckily， there are not so many unpredictable factors in the overseas markets. A Chinese game developer says that they only need to do well in the localization and the customer service in a foreign market. They never need to worry about， and have never met， the other factors beyond the game itself.

Foreign companies must admire the Chinese companies’ fate in overseas market. That’s because a denial for them in China might be a lifelong ban in this country.

Google is a typical example： in 2010， the search giant was forced to communicate with the Chinese government because of the compliance of its search contents. In the end it was forced to shut down its webpage-based search function in China and moved all its users to Hong Kong to continue the Chinese service for the users in China. It has not returned to the market of mainland China by now. According to the data from CNZZ， Google took 1.18% of the search engine market in China in March 2014， far behind he 58.78% market share of the champion Baidu. In comparison， Google’s market share in China once succeeded 30% before being forced out of this market.

“It will be of great inconvenience when many things are blocked in China. You have data and connections with these Apps. With the decreasing engagement， you will lose them.” says Chen Xu， a man working for the Chinese website Sina. Undoubtedly， this means the loss of users for these apps and also traps the users in an isolated island.

“Those Android users should watch out for their Instagram since they have nowhere to download it if they remove it，” says Chen Xu， who claims to be an intensive user of Instagram.

For him， this App is irreplaceable and indispensable. He used Instagram to record his life： such as taking and uploading the pictures of the dinners， or sharing the pictures of travel with his friends. He got to know many foreign friends through this App. This is a user’s experience that no domestic Apps with the same functions can provide.

When Instagram initially rose， there are several Apps in China imitating this American app， but none of them became successful. The competition is an important factor since these Apps， without any of their own features， could be accepted by users as easily as being abandoned by them.

But things might become different in the future. “We can easily buy an iPhone， but this does not mean we can easily get an app we like，” Jia Yin say.