Foreign online platforms' ad crackdown 'won't hurt app developers'

Updated 2017-02-15 09:56:37 Global Times

Overseas markets still offer plentiful opportunities

Tightened supervision of advertising by foreign online platforms such as Facebook will only have a limited impact on Chinese mobile tool apps' overseas business, and domestic developers are gaining momentum in foreign countries thanks to huge untapped opportunities, experts said on Tuesday.

Facebook "suspendeds all advertising channels" for Chinese tool app developers on February 8, including Beijing-based Qihoo 360 Technology Co and Sungy Mobile, which is based in Guangzhou, South China's Guangdong Province, due to concerns over Chinese advertisers' rule-breaking practices, according to financial news website yicai.com's report on Tuesday.

Applications that optimize batteries or clean up smartphone storage use are the targets of Facebook's crackdown this time. Some tool developers have delivered ads similar to smartphone warnings, such as "RAM is full," in a bid to induce users to download their apps, the report said.

Qihoo 360 has not responded to an interview request by the Global Times as of press time. Meanwhile, it is not clear when Facebook will lift the ban on Chinese app developers.

"Given that China's advertising supervision is not strict, many Chinese tool apps tend to make exaggerated or false claims by taking advantage of legal loopholes. Thus they may not be up to the standards of other countries when expanding their business overseas," Li Yi, a senior research fellow at the Internet Research Center under the Shanghai Academy of Social Sciences, told the Global Times on Tuesday.

Foreign ad giants are carrying out stricter standards on Internet marketing. In December 2016, Apple Inc removed several apps of Qihoo 360 from its Apple Store. When apps' improper management affects users' confidence in these platforms, they will instantly ask them to suspend operations and fix the problem, according to Li.

The moves taken by Facebook and the Apple Store, which represent almost half of the online advertising traffic segment in the US, has sparked concerns among industry players over whether Chinese app developers will lose their overseas turf in the absence of effective digital marketing platforms.

However, a spokesperson at Cheetah Mobile Inc, who declined to be identified, told the Global Times on Tuesday that the ban is likely to "have a limited influence on the company's oversea operations."

So far, Cheetah Mobile has launched several tool apps such as Clean Master in the US market.

"Most new users opt to install the app voluntarily. Cheetah Mobile has built a complete promotion mechanism globally, where users brought by a single channel, like Facebook, account for less than 10 percent of the total traffic," according to a statement the company sent to the Global Times on Tuesday.

The tightened grip over the industry, in a similar vein, is conducive to the company's consolidation of its leading position in foreign markets, the statement noted. "Users are more willing to choose apps that have built a huge base and good reputation."

Experts also pointed out that Facebook's move will not affect these apps' operations overseas in the long run, but it will improve their reliability.

Liu Dingding, an independent Internet industry analyst, told the Global Times on Tuesday that this issue will push Chinese companies to improve their internal disciplines and develop qualified products to protect users' security, legal rights and interests.

Li pointed out that Chinese developers of apps should figure out how to directly expand their presence abroad instead of relying heavily on platforms such as Facebook, Google and the Apple Store. "Too much reliance on these platforms makes domestic companies too passive," he said.

In recent years, many domestic tool app developers have rushed overseas in search of untapped opportunities. Most successful Internet companies in the overseas markets are those producing tool apps.

While China's app developers compete fiercely in the domestic market to fight for roughly 700 million Internet users, the overseas market is still an uncharted ocean, Li said. Besides, most of China's tool apps are free and updated frequently, making them more popular in overseas markets, according to Li.

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