Now Playing: GDSA Challenges Google Play’s Mistakes

Thanks to Sun Yongjie for his delivery.

A Reuters-based Huawei, Xiaomi, OPPO and Vivo are teaming up to create a platform called Global Developer Servie Alliance (Global Developer Services Alliance, GDSA). The news that developers outside China could upload their apps to the app stores of the four handset makers has caused a stir in the industry.

The thriller titles such as “Challenging Google’s Android Hegemony,” “Replacing Google Play” and “China’s Google Play Coming Up” are available in various domestic media outlets.

So what is the nature of the GDSA alliance? Can it really challenge or challenge Google Play?

Now Playing: GDSA Challenges Google Play's Mistakes

Overseas app stores are fighting each other and lack the basis for cooperative benefits

Let’s first look at GDSA’s official introduction to its platform’s basic business: GDSA platform provides unified access access for a number of mobile phone vendor stores, and developers can submit apps (including Android install-free apps, games, music, movies, books, magazines, or other digital content or services) through the registration platform. Hereinafter referred to as “Content”), it can be synchronized to the app store of several mobile phone manufacturers that have already cooperated with, and developers can choose to accept the ads provided by the platform to realize the SDK and get more and better promotional locations.

In addition, GDSA claims to have covered nine countries and regions, including India, Indonesia, the Philippines, Russia and Malaysia, mainly southeast Asian countries.

I do not know what the industry saw the above GDSA official introduction to draw any conclusion? In our view, let alone, the formality does not reflect the need to challenge Google Play, that is, there is no clearly unified form (e.g. a certain app store), but still the individual stores (e.g. Xiaomi, OV) app stores, It’s just that the same app can be uploaded to Xiaomi and OV’s respective app stores using the GDSA platform.

In fact, before GDSA was established, Xiaomi and OV had already operated their own ecology, including app stores, in nine countries and regions, including India, Indonesia, Russia and Malaysia, where GDSA was about to operate, and were constantly adding code.

Now Playing: GDSA Challenges Google Play's Mistakes

Xiaomi, for example, has more than 220 billion global distributions in its App Store (renamed GetApps) and already has 11 million daily active users in India (first launched in 2017). App developers can upload apps in the Xiaomi App Store for traffic bonuses and multiple combination spromotion slots (e.g. editing recommendations, Golden Rice Awards, installation must-haves, initial recommendations, etc.).

At the category level, games are the highlight of the distribution business. Xiaomi’s 164 million monthly active users overseas are 71.66 million daily, according to data released at last year’s developer conference, while Xiaomi launched a game distribution platform for Apple and Google App Stores in 2019.

In addition, Xiaomi App Store, renamed GetApps late last year, has launched the PROJECT SEAGULL Program, which will invest a total of Rs. 1 billion in resources covering the Classic Brand Golden Globeaward, Home Focus Chart, Feature Reviews, Custom Recommendations, Benefit Zones, Joint activities and other support for local developers and start-ups, together to build a diverse ecology.

Looking at OPPO, a software store, theme store, lock screen magazine, browser, game center and other multi-distribution matrix, covering India, Indonesia, Thailand, Vietnam, Malaysia, the Philippines and other countries and regions, overseas Internet ecological layout is also showing an increasingly complete trend. As of Last May, OPPO’s overseas software app store had nearly 40 million monthly live users and nearly 100 million monthly distributions.

Similar to Xiaomi, OPOO has launched a much-noticed supportive policy for developers, the Columbus Project, which provides developers with resources worth up to 30 million yuan and more than 3 billion exposures to support developers to achieve win-win results.

Now Playing: GDSA Challenges Google Play's Mistakes

As for vivo, according to public reports at the Vivo Game Developers Conference last April, vivo’s overseas stores are now living at more than 40 million a month and are continuing to grow; Game ads and other cooperation models, and will issue more cooperation preferential policies.

In the face of these facts, we do not know how much GDSA will play in the future. More importantly, the vast majority of the markets that GDSA initially locked in are supported by the current and future markets.

The domestic market continues to shrink overseas is Xiaomi, OV inch land must be contested

As we all know, in the past year, due to non-market factors, Huawei’s aggressive attack in China’s smartphone market has squeezed the market share of domestic handset makers, including OV and Xiaomi.

Huawei shipped 142 million units in China’s smartphone market in 2019, with a market share of 38.5 percent, up 35 percent year-on-year, according to Canalys. By contrast, OPPO, vivo and xiaomi shipments fell by 17%, 19% and 21% year-on-year, respectively.

Looking at the global market, huawei shipped 240.6 million units in 2019, with a market share of 17.6 percent, up 17 percent year-on-year, according to Canalys. By comparison, shipments from Xiaomi and OPPO both increased by 4% year-on-year. Vivo was included in the rest because it failed to make the top 5 in the world. But we learned from Counterpoint, another statistics agency, that vivo shipments increased by 8% year-on-year (Note: OPPO and Xiaomi both both grew 8% year-on-year).

So the question is, despite the sharp decline in the Chinese market, but from the global market, Xiaomi, OPPO, vivo still maintained year-on-year growth, why? The performance of overseas markets has played an important role.

Now Playing: GDSA Challenges Google Play's Mistakes

In the Indian market, for example, Counterpoint statistics show that Xiaomi’s shipments in 2019 increased by 5% year-on-year, OPPO increased by 28% year-on-year, and vivo achieved a 76% year-on-year growth rate.

In the Philippines, OPPO’s market share increased from 18% in the third quarter of 2018 to 20%, while vivo’s market share increased from 13% to 16%.

In Indonesia, opPO shipments grew 47% year-on-year in the third quarter of last year, Xiaomi 22% year-on-year and vivo 74% year-on-year, according to Canalys.

Above, we only use the available data on key overseas markets for Xiaomi and OV to demonstrate the importance of overseas markets, particularly Indonesia and the Philippines in India and Southeast Asia, in 2019, while the Chinese market has fallen sharply, in addition to the decline of Xiaomi and OV in the Chinese market and sustaining growth. these markets are in GDSA’s nine target markets.

Entering this year, due to the outbreak in China, analytics, a well-known market research organization, Analytics, published a report entitled “How does the new coronavirus affect the global and Chinese smartphone market?” Global smartphone shipments will be 2% lower than expected this year and 5% lower than expected in China, according to the report.

We don’t know if Strategy Analytics’s forecasts will finally materialise, but one thing is certain to be that China’s smartphone market will surely be the biggest hit, meaning that overseas markets will be a must for Chinese handset makers. But given that uncertainty over Huawei’s mobile phone development in overseas markets is still difficult to overcome in the short term, the Chinese market will once again be a major battle for Huawei, and the competitive pressure is bound to spread to other domestic handset makers, especially Xiaomi and OV, which have fallen sharply over the past year.

Therefore, in our above-mentioned overseas markets, in order to maintain their respective growth, Xiaomi, OV competition is bound to be even more fierce. In this situation, GDSA to achieve the sharing and cohesion of each other’s resources, it is almost impossible.

Now Playing: GDSA Challenges Google Play's Mistakes

Time-lapse easy This GDSA non-hard-core alliance

In fact, after the GDSA news was revealed, the industry found that the composition of GDSA, the mode of operation and so on with the previous China Mobile game market hard-core alliance is very similar, and the leading of them are playing the media. So there is a view that GDSA is an overseas version of the hard-core alliance that can replicate its success in China’s mobile gaming market.

Is that really the case?

Here we give a brief introduction to the extreme achievements of the hard-core alliance.

The Hard Core Alliance was formally established on August 1, 2014 under the English name Mobile Hardcore Alliance (M.H.A), which is made up of play curry media in conjunction with domestic first-line smartphone manufacturers: OPPO, Vivo, Coolpad, Jinli, Lenovo, Huawei, Meizu, And Nubian. Play Curry Media is responsible for the operation and management of the Alliance as the Secretariat of the Alliance (the same role as the current GDSA).

As for the original intention of the establishment of M.H.A., in short, the big background of the game CP is that the game CP does not fancy the channels of mobile phone manufacturers, with the right to speak is Baidu, 360 and other applicationmarket traffic entrance (so-called third-party app store), hard-core alliance will be mobile phone manufacturers to join forces to warm up, do mobile game distribution. The logic of operation is also very simple, as long as there is CP to the game to one of the league vendors, then other vendors can do the sharing of resources, play curry media for these vendors to provide application market building technology and operational support.

But it’s not what it used to be. With the growth of Xiaomi, OV sales, whether domestic or overseas app stores have a considerable scale and competitiveness, and is still adding yards, the foundation of the establishment of the hard-core alliance for the current GDSA has been quite weak, or even no longer exist. Coupled with the fact that our Xiaomi and OV are the most direct competitors in the market that GDSA wants to expand, GDSA’s sharing and combined efforts are unrealistic.

Now Playing: GDSA Challenges Google Play's Mistakes

More importantly, even if we look back at the hard-core alliance today, it’s hard to quantify how much substantial support it has for handset makers.

As of last year, for example, the hardcore alliance China mobile gaming market penetration rate reached 65.7%, the highest, according to the 2019 Hard Core Alliance White Paper.

Revenue and profit, the first half of 2019 annual report shows that the main revenue for playing curry media for mobile advertising, online video distribution, game intermodal services. Play Curry Media achieved solid growth for the fourth consecutive year, with its revenue reaching RMB1,198 million in the first half of 2019, up 78.8 percent year-on-year. Gross profit rose significantly to RMB171 million, up 142% YoY. Operating profit reached 94.3 million yuan, an increase of more than three times year-on-year. The number of mobile apps and mobile games it promotes increased to 5,255 from 2,538 in the same period in 2018. Due to improved technical efficiency, gross margin also increased significantly to 14.3% from 10.6% in the same period last year.

I wonder how the industry feels about the performance of the hard-core alliance? We think it’s not so much the success of the hard-core alliance as the success of the league’s leaders playing curry media. How do you see that?

First of all, alliance members, through this alliance earnings are not quantified indicators, and for mobile phone manufacturers, we believe that the original intention of joining the alliance should be to increase sales and market share, which is the most intuitive consideration. But after several years of development, the hard-core alliance of mobile phone manufacturers, in addition to Huawei, OV, other such as Lenovo, Jinli, Cool, Nubian, Meizu in China’s smartphone market has been marginalized, of which Jinli, Cool pie even in the Chinese market does not even have a sense of existence. Even OV experienced a sharp drop in sales last year.

Of course, we are not here to completely deny the role of the hard-core alliance, but with the mobile phone manufacturers’ own hardware innovation, operation and so on, the hard-core alliance for the considerable mobile phone manufacturers sales of their own pull up the role is quite limited, or even no inevitable link.

Another example of its limited role is Xiaomi, which did not join the alliance at the time, and is by far the only domestic mobile phone manufacturer to quantify revenue and profits beyond non-mobile phone hardware.

Second, in view of China’s smartphone market has entered the stock market competition, in the past two years, in the hardware itself innovation competition is intensifying at the same time, “eight cents across the sea, each show that it can” become the most important way for mobile phone manufacturers to drive sales, rather than what resource sharing and combined bring steam to bring the difficult to quantify the operation of the alliance.

It is worth noting that in the 2019 Hard Core Alliance White Paper, we see that expanding overseas markets becomes the future development strategy of hard-core alliances, which mentions the commissioning and refinement of the Overseas Alliance Developer Platform (which should refer to GDSA). So is this the wishful thinking of playing curry media, or really can get Xiaomi, OV substantive support? Combined with the above analysis, we prefer the former.

In summary, we believe that in looking at the GDSA, we should first consider what kind of substantial help it can bring to the alliance itself, if the members of the alliance can not get substantial benefits from it or not as good as each other, to talk about any challenges, or even replace Google Play, And it will only put us into the trap of noisy guests.