With the Chinese market for media growing each day, the opportunity for app developers and entrepreneurs is huge. There are over 1.2 billion mobile phones in China, and on average more apps are downloaded in this region than almost any other in the world.
It’s statistics like these that have kids entertainment companies increasingly seeing China as the media market of the future. For Trevor Lai, CEO, founder and creative director of UP Studios, this region is one of the most promising – and one that North American and European companies should be exploring more vigorously.
As the leader of the Shanghai-based animation company UP Studios, Lai is an expert in designing apps for Chinese markets. His animation company is currently creating the original cartoon series Super Boomi. The studio also has a hit app on the market called BOOMiGram.
The new 3D animation app is a first of its kind, letting users add 3D characters to photos and videos. Developed in China, BOOMiGram was also the first app to have an Apple tour. Downloaded in over 90 countries, it has hit the top 10 photo and video app downloads on the App Store.
Lai recently spoke at the Children’s Media Conference about Chinese IP and international companies doing business in China. He followed up his speech with a Google Hangout covering, among other things, how to design apps for the Chinese market, as well as apps that transcend borders.
First off, it’s not about the numbers, despite the fact that they’re huge. With over 1.3 billion people in China and 1.2 billion mobile devices, it can be easy to focus on the size. Yet entering as large a market as China isn’t as easy or straightforward as one would think.
“The fact that the numbers are so huge doesn’t mean that that translates into sales or into merchandise opportunity for your children’s property,” notes Lai. “It’s really about looking at the entire market and whether or not you actually have the resources to mine and develop China into a true marketplace for your product and for your creations.”
Along with determining whether or not the resources are there to succeed, creating content that can appeal to international audiences is also important. Lai cites apps that focus on messenger services such as BOOMiGram, Facebook’s US$19 billion acquisition WhatsApp, or the Asia-based LINE messenger service, which according to Lai earned US$57 million in last year’s first quarter, largely from the sale of animated stickers.
“One of the deals that we’ve recently done at UP Studios is we were able to monetize animated emoticons,” says Lai. “Currently, emoticons and emoji are a multi-million dollar industry in Asia. But I think in the US chat emoticons and chat-related value apps could be really popular as well.”
“If you’re an animation studio or a creator and you have a property or creator that you think could work as an emoji or an emoticon, creating those and actually selling those on a marketplace is a really viable avenue for generating revenue. To give you an example of scale, we had within one year 42 million downloads of Piggy in Love emoticons, with no money spent on marketing or advertising.”
Lai was able to monetize his animated emoticons within China by licensing his Piggy in Love emoticons to China’s number one dating website. Its 100 million users were able to send its emoticons through chats.
“One of reasons we’ve been such a success is our target audience is the Hello Kitty audience, meaning teenage girls up to white collar office women are buying the books and downloading our Piggy in Love emoticons because at that age group they are very much fans of manga, anime and cute characters,” says Lai.
And while Piggy in Love skews towards an older female audience in China, in North American markets Lai believes the adorable pig would be marketed towards younger audiences.
“In Europe and North America, a Piggy in Love audience would probably skew younger, more in the young readers section of a book store for example,” notes Lai. “In China, a lot of the visual tastes are different than they would be overseas. So it’s very important for you to look at your property and see is this a kids property or in China – in Asia at large – would it be appealing to an older audience and is female-skewing or male-skewing? There are different tastes in Asia and it’s very important that you’ve done your research before launching characters here.”
Along with researching and releasing apps, Lai suggests that companies make sure they have the resources in place to support the app once it’s released – and to constantly update. Especially for Chinese audiences, who have an increasing appetite for sophisticated mobile tech and Hollywood films.
“Some of most impressive mobile technology, web technology, logistics technology is actually taking place right now in China,” says Lai. “I think the idea of Made in China is really shifting towards a Created in China mentality. The idea that China is a growing market is going to eventually switch to China is a leading market to entertainment properties around the world.”
In terms of getting a spot in this future market, Lai suggests you get a head start on the competition. As the market continues to open up, large players are already putting stakes in the ground: “My advice to you is to come to China sooner rather than later, and spend time on the ground.”