I recently spoke at the Global Mobile Internet Conference (GMIC) and had a chance to learn a bit more about the Chinese mobile market from the CEOs of Xiaomi, an emerging low cost smart phone vendor and UCWeb, a mobile browser that has been downloaded over 1.5 billion times around the world.
There are over 500M mobile subscribers in China. That is 1.6 times the total US population!
While social networks is the 3rd most common activity of smart phone users in the US, web browsing is the 3rd most common activity of smart phone users in China, for two main reasons: most Chinese are commuting for hours using public transportation and spend a large portion of that commute on their mobile phones and the lower penetration of personal computing in China.
While the market offers great opportunity, three challenges make it challenging to tap into that opportunity:
- Wide range of devices
- Very fragmented app store market
- Language and culture differences
The funding landscape in China is much more of a supply market. One the one hand, the surge of wealth has led to investors chasing deal-flow. On the other hand, high quality deal flow is still scarce. This has led to high valuations on recent deals (sounds familiar to some extent, doesn’t it?)