Social apps big hit in overseas markets

Li said the localization of social products is a vital part of Chinese companies' efforts to gain more footholds in various Middle Eastern markets.

Supported by more than 10 overseas localization operation teams in countries such as the United States, India, Egypt, Turkey, Thailand and Indonesia, Newborn Town, established in 2009, started deploying more resources to developed markets in the past two years. The Hong Kong-listed company gained breakthroughs in terms of app downloads and revenue, especially in North America, the European Union, Japan and South Korea.

Apart from its rapidly growing social networking business, Newborn Town has also been diversifying development opportunities in overseas markets and proceeding with innovative businesses such as refined games and metaverse.

For instance, it has kept a close eye on metaverse, Web 3.0, and many other cutting-edge technologies and application scenarios. It has tested metaverse modules in its product Yumy, into which a group of digital collectibles has been integrated while building strategic partnerships with companies possessing top virtual technologies to jointly discover more possibilities for virtual social scenarios.

The metaverse has been described as a world of endless, interconnected virtual communities where people can meet, work and play, using such technology as virtual reality headsets and augmented reality glasses.

Li said cooperation with overseas partners is an important part of Newborn Town's localization strategy globally. Through these partnerships, the company will be able to work with businesses in both upstream and downstream industry segments in those target markets, better understand their conditions and customer preferences, and enhance the brand's influence.

Supported by dozens of apps in the fields of social networking and games, the company saw its sales revenue soar nearly 100 percent on a yearly basis to 2.4 billion yuan ($354.79 million) in 2021, while it logged 309 million yuan in adjusted net profit during the year.

The accumulated downloads of Newborn Town's social products reached 344 million by the end of 2021. The monthly active users (MAUs) of the social products reached approximately 21.79 million in December, nearly doubling the average MAUs of 2020. Benefiting from the rapid development of the social business, its value-added service revenue increased significantly in 2021, up over 200 percent year-on-year.

Even though the COVID-19 pandemic has limited people's movement and has hit many businesses, new demand has generated new supply, including new products, applications, models and business formats, under such circumstances, experts said.

With the rapid development in the Middle East market, some local companies in the region have seen the success of Chinese products and services. They have also begun to try to develop local products in social, entertainment and other fields. Many of the products have already made decent financial returns and created jobs, said Wei Xiaoquan, a researcher specializing in regional economic development at the University of International Business and Economics in Beijing.

Zhang Yongjun, deputy chief economist with the China Center for International Economic Exchanges, said Chinese app developers have taken a larger share of downloads in the global market in recent years, especially in countries and regions participating in the Belt and Road Initiative. The influence of these companies is expected to grow in the next decade.

Zhang said COVID-19 not only propelled a large number of foreign consumers to purchase more products through online channels but also pushed them to open more social network accounts and spend more time on various social apps.

"Previously, popular app categories in overseas markets were games, photography and tools. Now, we are seeing more apps created by domestic companies generating revenues through quality video and audio content and social network-driven commerce. This has boosted China's trade in services," he said.

China's services trade value grew 25.8 percent on a yearly basis to nearly 1.46 trillion yuan in the first quarter, according to the Ministry of Commerce.

In contrast to merchandise trade, trade in services refers to the sale and delivery of intangible products such as transportation, tourism, telecommunications, construction, advertising, computing and accounting.

During the same period, the country's services exports expanded 30.8 percent year-on-year to 713.98 billion yuan while its services imports amounted to 743.01 billion yuan, up 21.3 percent year-on-year.

China has taken a slew of measures to expand the opening-up of the services industry and pledged to make more efforts to promote the opening-up of trade in services to a higher level.