FB Pixel no scriptChinese apps catch up with US peers despite headwinds | KrASIA

Chinese apps catch up with US peers despite headwinds

Written by Nikkei Asia Published on   3 mins read

Security concerns and lack of market access drives crackdowns around the world.

Smartphone applications developed by Chinese companies are spreading around the world, despite the growing trend of governments viewing them as possible security threats.

Looking at the top five downloads in 95 countries and regions, Chinese apps such as TikTok accounted for a third of the total in the first quarter of the year, according to US research company Sensor Tower, which looked at downloads from Google and Apple distribution services.

Of the total 475 top-five apps for the first quarter, 156 were Chinese. That represents 33% of the total and an 8-point rise from 2020.

ByteDance’s TikTok, a short video-sharing platform, was the most popular, hitting the top five in 82 markets, or 86% of the total. Its CapCut video editing app is also rapidly growing, reaching the top five in 48 markets, or 51% of the total.

The app from fast fashion purveyor Shein was popular among young people, with an especially strong performance in Europe and South America. It was in the top five in 10 countries, including Spain and Brazil.

In the US, Chinese apps took the No. 1, No. 2, No. 3 and No. 5 spots. Chinese apps are in the top five in around 90% of countries and territories but are absent from the top 10 countries, including India and Japan.

“New technologies and innovations with the user’s perspective in mind are indispensable in the Chinese market,” Toshihiko Okano of NTT Data Institute of Management Consulting. “Companies that win at home are developing abroad and are highly competitive.”

TikTok is known for its algorithm that makes recommendations based on a user’s preferences. Shein is popular among the young because of its ability to provide inexpensive products by tapping Chinese supply chains.

US-developed apps have about the same level of presence as Chinese apps, with Instagram and other apps from Meta accounting for 25%. But American apps were 50% in the first quarter of 2020, so the US side is now running neck and neck with China.

Countries around the world are tightening restrictions on Chinese apps, citing national security concerns. In the US and Europe, public officials have been barred from installing them on government-issued devices.

The US state of Montana banned TikTok from being downloaded there. Shein was cited as posing a risk of data breaches and intellectual property infringement in a report issued by an advisory body to the US Congress, the US-China Economic and Security Review Commission.

Despite these headwinds, Chinese apps continue to be launched as their popularity soars. The No. 1 downloaded app in the USS and Canada in the first quarter was the Chinese mail order app Temu, which was launched by PDD Holdings in the fall of 2022. ByteDance’s photo-sharing app Lemon 8 launched in fall 2021 is popular in Japan and the US.

Still, security concerns remain. The Chinese government has the authority to order companies within its borders to disclose personal data they hold.

“We cannot rule out the possibility that the data collected from around the world will end up in the hands of the Chinese government,” said Jun Osawa, a senior research fellow at the Nakasone Peace Institute.

There are also headwinds beyond security. While Chinese apps are spreading around the world, most foreign apps remain unavailable in China due to government regulations. This imbalance that closes off the Chinese market could lead to further pressure from governments despite their popularity.

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.


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