Challenging Google: Huawei, Xiaomi, OPPO and vivo jointly create a Chinese version of Google Play

The vision of "big mobile phone manufacturers jointly launching app stores" seems to be coming true. Yesterday, according to Reuters, China's four major smartphone manufacturers Huawei, Xiaomi, OPPO and Vivo are jointly launching an ecological platform that is comparable to the Google Play Store, with the goal of allowing non-local developers to upload applications to their app stores in real time.

The new platform, called the Global Developer Service Alliance (GDSA), will make it easier for developers of games, music, movies and other apps to market their apps around the world.

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Sources said that the GDSA platform was originally scheduled to be launched in March this year, but now it seems that the launch plan may be affected by the spread of the new coronavirus. The platform will initially cover nine countries and regions including India, Indonesia and Russia.

Although the four smartphone manufacturers declined to comment on the matter, the action of breaking down barriers and jointly launching services began as early as August last year. In August last year, OPPO, vivo and Xiaomi also announced the establishment of the "Inter-transfer Alliance" to improve the file transfer experience on the Android platform. According to the plan, mobile phone users of these three brands can achieve fast point-to-point file transfer without downloading third-party apps.

In last year's announcement, the three companies said they "welcome more manufacturers to build an ecosystem together", which was a gesture of extending an olive branch to Huawei. After all, as the manufacturer with the highest sales volume of mobile phones in China, Huawei's attitude is more important.

If Huawei joins the alliance, the new application market will inevitably become a force that cannot be ignored. According to a report released on January 29 this year by global market research institutions Strategy Analytics, Counterpoint Research and Canalys, in 2019, Huawei, Xiaomi and OPPO ranked second, fourth and fifth in the world in sales respectively, and vivo ranked third in global 5G mobile phone sales last year.

If the joint application market of these four companies goes online, its coverage will account for nearly 40% of the global market.

Based on its own advantages, it challenges Google and takes a share of the application market.

Google launched its own app store in 2008. After 12 years of development, the Google Play Store has become a developer platform covering more than 190 countries and regions around the world and billions of active Android device users.

In addition, Google takes a 30% commission on content such as movies, books and apps sold in the Play Store. Sensor Tower analyst Katie Williams said that Google's sales on the global Play Store (excluding China) in 2019 were US$29.3 billion, with revenue of approximately US$8.8 billion.

Image source: SensorTower.

Therefore, the emergence of the GDSA alliance must be a reflection of the desire of Huawei, Xiaomi and other four major mobile phone manufacturers to share a share of the global application market. In addition, these four companies have their own advantages. For example, Xiaomi has a very strong user base in India, Vivo and Oppo have performed well in Southeast Asia, and Huawei has a large share of the European mobile phone market.

In addition, Nicole Peng, vice president of mobile business at Canalys, said: "The GDSA alliance will also help the four major mobile phone manufacturers to increase their voice and gain an advantage in the competition with Google."

According to statistics from consulting firm IDC, these four mobile phone manufacturers accounted for about 40% of global mobile phone shipments in the fourth quarter of 2019. Xiaomi, Oppo and Vivo can use Google services without restrictions in the international market, but due to the impact of the US ban in 2019, Huawei can no longer use Google services and instead vigorously develops its own Hongmeng operating system.

IDC smartphone analyst Will Wong said: "As hardware sales slow, Chinese mobile phone manufacturers are working hard to expand their share of the software and services market. App stores, pre-loaded apps, advertising and games are all areas that can create new revenue." It can be seen that the GDSA platform is also an inevitable trend for mobile phone manufacturers to pursue profits.

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On the GDSA website, the logo of Hong Kong Android ecosystem platform Wanka Online is also listed, but Wanka Online currently refuses to confirm its connection with it.

Analysts believe that GDSA may attract application developers by providing higher exposure than Google Play, and the new platform can also provide more financial incentives. "By making it easier for developers to push their products in the Huawei, OPPO, vivo and Xiaomi app stores, these companies will gradually attract more developers and bring more applications," Williams said.

However, it seems that it is a challenging task for several competing peers to make an alliance bigger and stronger. "This task is definitely difficult to implement, and it is hard to say which company will play a greater role in it. There has been no successful case before." Nicole Peng said.