How We Discovered the Underground Chinese App Market

Or, how Robert Fortune’s tea heist shaped China’s iOS market

There is a dirty secret lying beneath China’s iOS app market, and our revenue is hiding somewhere in it.

In December of 2011, right before Christmas, we released our first iOS application Bilingual Child. Immediately after, we saw downloads flooding in from China.

We had tapped into one of the biggest markets in the world. We knew the revenue was just around the corner.

But it never came.

We figured it was because we were teaching Spanish to native English speakers. We weren’t giving our Chinese customers localized content.

Localized content for Mandarin speakers

So we created a new version of our application for Mandarin speakers to learn English. We rerecorded all of the audio with a native Mandarin speaker; had three translators cross-reference every word and phrase used in the application to make sure our Mandarin was correct; remade our main character, animations, and marketing assets to showcase our new bilingual Mandarin boy; and released the new version into the Chinese App Store.

Again, the downloads flooded in — but no sales.

We were perplexed. We knew China was a huge opportunity for us if we could break into it.

Something just didn’t seem right, so we dug in a little further to figure out what was happening.

The underground Chinese App Market brings more than $10 million a year in revenue from Stolen Apps

We discovered our apps on iPadIpa.com, a Chinese clone of Cydia.

Then we came across KuaiYong (aka 7659.com), an app market that allows users to install iOS apps without even jailbreaking their phone.

The site even uses geolocation to hide its store from users outside of China.

In 2012 42% of iPhones were jailbroken in China

That’s thirty-four million jailbroken devices with access to apps stolen through illegal app stores.

Since its rise in popularity this year, KuaiYong has actually decreased the jailbreaking of iOS phones from 42% to 32.3% by giving users access to stolen apps without the risk of jailbreaking. That still leaves approximately 28.3 million jailbroken iOS devices active in China.

How bad was the Chinese app market for us?

To date, we have made $58.98 in China’s iOS store, compared to $41,780.20 in the United States.

So why is China so willing to jailbreak their phones and download illegal software?