China Apps Quietly Hoover Up Downloads in Shadow of TikTok

While SHEIN originated in China, it is one of the largest shopping apps in the United States, SHAREit has been banned in India amid widespread popularity elsewhere, and Likee is chasing TikTok — but desperate to escape a similar fate.

China's app makers need to be flexible in a world where key markets have become hostile to the technology of their region.

They either go under the radar in regions where the war on privacy, protection and geopolitics rages — or switch to friendlier markets to gain millions of downloads.

Experts say that this could represent an unstoppable rise for China's smart and sensitive technology, depending on the long-term harm that security and diplomatic squabbles could do to the brand Made in China.

For the time being, the tactics of Chinese-owned platforms — fast reflexes to their customer base and aggressive social media marketing — are winning fans in unexpected locations.

Fast-fashion online retailer SHEIN has deployed a legion of influencers and celebrities in the US, including singers Rita Ora and Katy Perry, to the app store rankings.

The platform also promoted the Perry-curated collection of affordable tees, dresses and accessories that coincided with the release of its album this year.

The company now boasts one of the top five free shopping applications in the Apple App Store in the US, Australia and France, according to the US-based research firm Sensor Tower.

“Many of their global users will actually be unaware that they are dealing with a Chinese company,” Hong Kong-based retail analyst Philip Wiggenraad said of such apps.

In a February post on WeChat to recruit suppliers, SHEIN said it had operations spanning more than 200 countries, with 2019 sales exceeding 20 billion yuan ($2.96 billion).

Catch me if you can

Even TikTok, battered by an ownership dispute in the US where it is accused of being a security risk, has racked up around 800 million installs this year globally despite the squall of negative publicity, Sensor Tower data shows.

That comes despite its blacklisting in India, which has also banned more than 200 other Chinese apps in the wake of a deadly border dispute earlier this year.

TikTok is now struggling to close a deal allowing it to continue its massively popular US operations.

The travails of the app — and others winded in the geopolitical ruckus — may signpost the way ahead for other less well-known Chinese platforms.

File-sharing app SHAREit, banned in June by India, has quickly pivoted to new markets.

It says it already has 20 million active monthly users in South Africa and is also targeting Indonesia, which has the world's fourth-largest population.

Others are based outside China, and experts claim that early relations with western companies could offset possible boycotts by suspicious governments.

“We have servers in several different locations across the globe, including the United States, Singapore and India,” a spokesperson for Bigo, owner of short-video app Likee, told AFP.

“But we do not have any servers in mainland China or Hong Kong.”

Bigo was built and headquartered in Singapore before being bought by Chinese firm JOYY, which is listed on the Nasdaq in New York. The app was the third-most installed by a Chinese publisher for the year to mid-September, according to Sensor Tower.

Adapt or die?

With privacy, cybersecurity and potential influence by Beijing all hot-button issues, Chinese developers will need to do a lot more to convince governments and consumers in the long term.

Suspicions will likely “change the landscape in which they operate, and force them to adopt very different business and data localisation strategies”, said Severine Arsene of the Chinese University of Hong Kong.

That could mean locating a company’s headquarters and tech development in “safer” territories, or locating data processing in different territories.

“This requires adapting the whole tech architecture of a given service,” she added.

The pressure points to the fundamental issue of Chinese companies being seen as “de facto proxies” of the Chinese Communist Party, says Hinrich Foundation research fellow Alex Capri.

“Chinese firms will find it increasingly difficult to compete outside of a techno-authoritarian digital landscape,” he added.

Chinese businesses are highly wary of whether they could be pressured to share data with the government.

Despite recent battles with Washington and New Delhi, Beijing has shown no signs of "putting aside its technological ambitions," said Ho Woei Chen, economist at the United Overseas Bank.

Even the potential decoupling of China from the global technology supply chain may have the unintended effect of pushing "Chinese companies to upgrade and build up their capabilities," she added.

And buffeted by a large domestic market, "they're likely to stay in business."