Meet UCWeb, the Chinese mobile browser with 400 million mobile users: Q&A with Yu Yongfu, chairman & CEO, UCWeb

Mobile Web in China is booming. The latest stats from China Internet Network Information Center (CNNIC) estimate that there are now 464 million mobile Internet users; and the three mobile operators share 360 million 3G subscribers, according to mobiThinking’s latest calculations.
One company that is riding the Chinese mobile Internet wave is the mobile Internet browser UCWeb – already established as the top third-party browser in China, it is now rapidly expanding its global user base.
This week at the GMIC conference in San Francisco, USA, UCWeb announced its UC+ developer program with the first ‘Light App’ for the platform from Amazon. Light Apps are cheap-to-produce, light-weight, browser plug-ins that run on any mobile handset with the UC browser installed. These apps require little or no download and allow users to switch seamlessly between various Light Apps. UCWeb is one of a growing number of so-called Chinese ‘Super Apps’ including, instant messaging (IM) WeChat, Internet portal Tencent and microblogging site Sina Weibo, which are all building LightApp ecosystems.
mobiThinking caught up with UCWeb’s chairman and CEO, Yu Yongfu, to find out more about mobile Web in China, UCWeb and Super Apps.

Q1. What is UCWeb and what does it do?
UCWeb is a global Internet software and services company. UC Browser, its flagship product, has 400 million users worldwide. UCWeb has built its browser into a one-stop open platform of Internet services, content and gaming. These popular services are provided directly or with partners. UC Browser exceeds native browsers like Chrome [Google] and Safari [Apple] in active usage time in many markets including China.

Q2. What are the top countries for UC Browser? Are any differences between mobile browsers in China compared with those in the US, elsewhere?
UC Browser is the world’s largest third-party mobile browser by user base. It is the No.1 third-party mobile browser in China with more than 50 percent market share and it is the top mobile browser in India with 30 percent market share. UCWeb also has more than 10 percent market share in 10 other countries.
UCWeb redefined the browser in two ways. First, UC Browser was created based on a mobile-first strategy – the browser is completely tuned to mobile devices and did not have to make the transition from the desktop to mobile. Second, UC Browser was the world’s first to adopt cloud architecture on the mobile browser, creating a one-stop open platform for Internet services and content. Other mobile browsers in China have been inspired by UCWeb, and they also aggregate content and services on their browsers.
Mobile browsers are often used as a search or Web navigation tool in the US.

Q3. How big/important is mobile Web in China today (compared to when UCWeb started)? How does this compare to the USA?
Mobile Web in China is booming with 464 million users, according to CNNIC (July 2013). With it, revenues are growing rapidly. The Chinese Internet research firm iResearch (September 2013) estimates that China’s mobile Internet revenue reached 24.19 billion Yuan (US $3.97 billion) in Q2 2013; that’s up 71.4 percent from last year. Of that, mobile shopping takes the largest share (38.5 percent), as mobile value-added services continues to decline (36.1 percent), mobile games’ share is also in decline (12.1 percent), as mobile marketing (10.2 percent) and mobile search (3.2 percent) continue to rise.
Mobile browsers, led by UC Browser, play a key role in the mobile Internet market in China. Users in China not only browse heavily, they also use the mobile browser as a reading app, a video-viewing app, shopping app, etc. While in the US, users often use native apps for those purposes.
UCWeb adopted a mobile-first approach from the outset and has grown rapidly alongside the smartphone industry, which was in its infancy when UCWeb was founded. China is now the world’s largest smartphone market. There could be as many as 330 million smartphones in use in China, according to estimates by iiMedia.

Q4. What trends are you seeing in device usage in China? What makes/types of handset/capabilities of handset are most popular? How many different types of device (in total) are you seeing? How does all this compare to the USA?
The Android operating system dominates China and the Asian markets, generally. Android phones take a much larger share than iPhone, there more developers for Android than for iOS, and many more Android apps are developed than iOS apps.
While iOS is still strong in the US market, there has been exponential growth in the Android community through 2012 and 2013, while the growth of iOS’ share remains stagnant.
An estimated 250 to 300 million smartphones will be shipped in China in 2013 with Android representing 80 percent of the market, iOS with 10 percent and Windows Phone with 2-3 percent. The growth of the tablet market in China has been slower than expected. By contrast, there has been sizable growth of Android tablets in the US, with the largest increase in Amazon’s Kindle line of tablets.

Q5. How does mobile Web use compare to mobile app use in China? Which format do you expect to dominate? Are you seeing much in the way of Web-based apps?
Both WebApps and native apps have experienced fast growth in China. However, the development of native apps shows a polarizing trend: top apps have been growing faster than long-tail [less popular, less frequently downloaded or used] apps. Some of these top apps, i.e. WeChat (IM), Sina Weibo (microblogging) and UC Browser, are evolving into what we at UCWeb refer to as Super Apps – they are transforming into platforms that support third-party apps and services, in the form of Web apps or Light Apps. These Super Apps are changing users’ habits.
Meanwhile any native app outside of the top 20 on any given app store has seen reduced usage in the past year, as users have less desire to try new apps.
The Web app is a preferred technology format for long-tail apps – this is the consensus of major players in the mobile Internet sector, for example, Baidu [China’s leading search engine] launched its WebApp platform, while UCWeb’s WebApp store has been in service for two years.

Q6. How do Chinese people use the mobile Web? What are the most popular activities? What are the top 10 most popular sites? How does this compare to USA?
Chinese people use mobile Web mostly for information, and Web games. A user browses more than 700 pages of content on average monthly, 95 percent of the users read news, blog and novels with a mobile browser.
According to CNNIC (February 2013), the most popular activities for mobile Internet users are instant messaging (84 percent), search (69 percent), online music (51 percent), microblog (48 percent), online literature (43 percent), social networking (42 percent) and online gaming (33 percent), online video (32 percent) and email (29 percent). These are all great ways of killing time on their long commute to work.
All top 10 Websites in China are local to China and include search, shopping, IM, etc.

Q7. How big/important is mobile advertising in China? Do you have any stats? Is mobile advertising in China very different to the USA – how come?
Mobile Internet companies in China have found a number of innovative ways to monetize traffic beyond advertising; however, mobile advertising is growing rapidly in China. It is important to note that the market is still much smaller than the PC advertising market.
It’s difficult to find estimates for mobile advertising as a whole, but in-app advertising in China (this doesn’t include browser-based ads) is estimated to reach 2.57 billion Yuan (US$422 million) in 2013 by iResearch (September 2013).
In China, on native apps, brand ads haven’t proved very popular among advertisers and most of the ads are results based. Hence, mobile ads are evolving to be more precise, and based more on user behavior.

Q8. What are your tips on mobile marketing to Chinese consumers? What works?
Having a good product is most important. Global companies need to localize their product for Chinese consumers. Simply developing a Chinese version of a global product may not be successful with Chinese users. Instead a product should be localized to meet the specific needs of the Chinese market even if that means creating a separate or distinct product.
Companies that market products in China should expect their operations to look very different than the US operations. The China strategy should vary over time and vary as the landscape with China itself changes.
Finally, come to China. Spend time getting to know the market and users.

Q9. Is it important that marketers localize campaigns in China? How do they go about this? What other sort of targeting should be on the agenda?
Localized campaigns are the only way to go in China. In fact, think ‘hyper local’. Tailor the message to specific segments of the market and understand that there are ‘multiple Chinas’. For example, China’s tier 1 market resembles the US in terms of technology, spending preferences, etc. China’s tier 2 market, which is much larger looks very different including lower socio-economic and technology spending levels.
Evernote is an example of a mobile company that has done a good job, especially in terms of product in reaching its target audience. Evernote built a China team early; they understand Chinese users and improve their products based on Chinese user feedback. It has localized its product for China, adapted its design philosophy and even renamed the product, Yinxiang Biji. This name is more aesthetically appealing to Chinese consumers name than just translating the ‘Evernote’ phonetically as many global brands tend to.
Evernote has also adopted great partner strategy, helping the company to become integrated into the local ecosystem. The company has introduced shareholders with Chinese backgrounds and has built business partners in China, including UCWeb.

Q10. What other tips do you have for US/Western companies that wish to engage Chinese consumers via mobile? What about barriers – are there regulatory issues for example?
Come to China. Get off the beaten path and seek to understand the target Chinese customer. The number of visits a CEO makes to China is a good gauge of how seriously a company takes the Chinese market.
Integrate into the local ecosystem. Find partners who value and respect US entrepreneurship with which you can work to build a comprehensive market strategy.
Have patience. In many ways, the Chinese market is increasingly as important as the US market, which means US/Western players need to dedicate the same level of effort in decision-making, and the same levels of investment, and enthusiasm to this market.

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