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Silicon Valley Looks to China Market

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Customers check out iPads at an Apple outlet in Binzhou in northeastern China.

Apple delivered a challenge to its troops at its annual Worldwide Developers Conference in San Francisco last week.  The company rolled out a slew of improvements in its Mac, mobile and Web browser software to support products developed for one of Apple’s fastest growing markets.

 
“Get your apps ready for China,” Apple executive Craig Federighi exhorted about a thousand developers at the conference.  It’s clearly Apple’s move to put a stake in the ground in a market with a growing middle class hungry for tech.
 
Even though Apple products are wildly popular in China, a spate of competing mobile devices using Android dominate the market.
 
A startup called TrustGo Mobile Security is counting on Android’s preeminence in the Chinese market.  Because Google doesn’t have an official app store in China, Android developers are relying on third-party distributors.  That means a lot more malware and security breaches for users. TrustGo sees that problems as an opportunity for its Android-based security app.
 
A Mature Mobile Market
 
“Already China has over a billion mobile users,” says TrustGo’s head of marketing, Jeff Becker  “Most users have never even put a landline into their houses and go directly to mobile.  So it’s a very mature mobile market. And what we do is make it simpler to find apps that are safe and install and use them on their phones more easily.” 
 
Plenty of other Silicon Valley entrepreneurs also have their eyes on China.  But in addition to the obvious language issues, doing business in China requires connections and the ability to navigate government and cultural barriers.  Firms that already have partners and employees on the ground in China definitely have an edge.
 
Another essential ingredient is an understanding of what appeals to Chinese consumers.  TrustGo CEO Xuyang Li says the Chinese version of the company’s app is very different from the U.S. version.
 
“The western interface tends to be more straightforward, very clean,” he says. “But the Chinese products tend to be a more colorful style.  So we need to make modifications to the interface to meet the needs of the users.  And also we need to make layout changes to make the Chinese user feel more comfortable.”
 
Text message spam is also much more common in China.  So the company added additional anti-spam features.  And because Chinese users pay for every byte of data, the Chinese app has more features to help customers monitor and limit their data usage.
 
Mobile devices aren’t the only targets for startups looking to do business in China.  Andy Parng is founder of Sologamoco – named for its focus on combining social, local, gaming, mobile and commerce in a single social networking site. 
 
A Focus on Socializing
 
The English translation of the site's name is “Groove With Us.”  Government censorship is a big barrier in China to content oriented products such as social networking sites.  Parng ‘s solution is to highlight socializing.
 
“We say, ‘eating, drinking, playing and having fun,’” he says.  “And the government actually promotes that to stimulate local consumption and the local economy. So that’s the direction we want to focus on.”
 
Parng sees a big opportunity for introducing a Web 2.0 experience to Chinese users who are still primarily socializing online with static forums and bulletin board services.
 
The company is also working on a social payment service called PayEVER.  Parng says both services will be ready to launch for public testing by the end of this month.
 
Experts say one of the big challenges for these would-be players in the Chinese market is intense competition from many already established local firms.  The other is the proliferation of copycat products. TrustGo CEO Xuyang Li says the only solution to that is to introduce technologically superior products and never stop innovating. 
 
And don’t count Apple out.  Both companies are already planning to launch iPhone app versions of their products.
 
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