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Internet penetration in Tier II and Tier III cities is the biggest challenge for growth: Tao Li, Founder and Executive Director, APUS Group

Li says lack of good internet connectivity in Tier II and Tier III cities remains a challenge for his company. He says Android fragmentation remains a concern for every developer.

Tao Li Founder Apus Launcher

Tao Li, Founder and Executive Director, APUS Group


India’s smartphone market set a second-quarter shipment record with single-digit annual growth. According to Counterpoint Research, the smartphone makers shipped 37 million units during the quarter ending June 2019. While Chinese smartphone makers dominate, there are winners in other pockets as well. Since India’s smartphone market is a majority Android dominated, the space has become enticing for third-party developers as well. One such developer is APUS Group, which has a popular customization app called APUS Launcher on Google Play Store.

APUS Launcher came at a time when Chinese smartphone makers were still trying to make a mark in the market. The app rose to fame in 2015 when App Annie called it a breakout Android App. Now, with over 1.4 billion users, the company is looking for a future beyond smartphones. One where personalization will be even more important than now. In an interview with BGR India, Tao Li, Founder and Executive Director, APUS Group, talks about its India journey, challenges with Tier II and Tier III cities, Android fragmentation, GDPR compliance and future prospects. Here is the excerpt from the interaction, lightly edited for clarity.

What was the biggest roadblock while creating the APUS Launcher?

Tao Li (TL): The biggest challenge lies in localization. There are some crucial targets for enterprises, especially Internet enterprises, to consider in the process of localization. These include politics, policies, laws, culture and religions, etc. Therefore, as a Chinese company, which enters the overseas market, we had to be well aware of the fact. We fully respect local culture and integrate ourselves with the local rules including culture, religions and laws, etc. The respect for local culture is one of the key reasons for APUS’ success. We have gained 1.4 billion users quickly in the past four years.

We have set up branches in all the main overseas markets to realize localization better. For instance, we set up a localized R&D center and marketing platform in India. The marketing platform takes on the functions of business development, marketing communication and investment, etc. as the local people have a better knowledge about local culture, religions and laws.

Since APUS Launcher, you have introduced other apps such as a browser as well. What was the thought behind the move?

TL: From the beginning, we have been building the APUS System on five basic modules of “system management, interactive interface management, application management, information and content management, social and account management.” APUS user system has evolved fast and developed over the past three years. We have launched a series of functions and products including search engine, cleaning acceleration, power saving, phone security, smart folder, message center, application market, theme wallpapers, camera shooting, file management, input method, flashlight and APUS Discovery. The five modules gradually formed 12 subsystems.

The subsystem of browser acts as a part in the module of “information and content management.” It provides users with a more convenient gateway to engage in entertainment by integrating the functions of web surfing, web navigation, smart search, app downloads, music downloads and video downloads. APUS Browser, along with other APUS products, constructs a complete user system and gateway to access the Internet – this is the core ideology here.

In the past three years, you have seen an install base of one billion. Can you please break down this install base across different apps and tell us key takeaways from this app distribution?

TL: Overall, APUS Launcher, APUS Browser, APUS Security Elite and APUS Booster+ are the most favored products by global users. But it may vary with countries and regions. For example, APUS Launcher is very popular in Brazil, Indonesia and Mexico. It often ranks in one of the top 5 in the category of “personalization” in Google Play. According to our data, up to April 30, 2018, APUS Launcher has ranked first in 87 countries/regions and top 5 in 103 countries/regions in the category of “personalization.”

Our security-related apps are particularly popular in the United States and India. Powerful Cleaner was launched in Google Play on January 11, 2017. As of April 30, 2018, it has ranked first in 12 countries/regions and is among the top five in 30 countries/regions in the category of “tools.” New apps such as APUS Camera is popular in the regions of Europe and America.

The Chinese market has reached saturation in terms of smartphone sales. How can the growing smartphone sales in India benefit APUS?

TL: India’s smartphone market is the most attractive destination for numerous smartphone-makers in China, South Korea and Taiwan since it is the world’s second-largest market for smartphones after China. According to IDC, India’s smartphone market saw a shipment of 30 million units in the first quarter of this year. The firm expects the smartphone market to continue its double-digit growth this year.

The rise in smartphone sales in India is directly related to emerging trends such as:

1. Increasing Internet penetration of tier 2 and tier 3 Indian cities
2. Growing number of millennials aged between 17 and 35 years of age, who are always on the go
3. Increasing consumer preference for the mobile phone over TV for consuming content online.

Many of these trends are similar to China’s market. With two-thirds of its 1.2 billion people under the age of 35, India offers plenty of opportunities. Apart from the colossal growth in smartphone sales, India, being an Android-driven market, creates a conducive environment for our company. APUS has brought superior quality offerings specializing in Android development and information services, such as APUS Launcher, APUS Browser, APUS Messenger Centre and APUS Flashlight to name a few. India is a crucial market for us, and we would continue to study India’s Internet industry and consumer behavior to innovate and achieve greater scalability here. We are looking to make India our base for Asia and further strengthen our presence as we evaluate more partnership opportunities with Indian firms.

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How do you plan to target Tier 2 and Tier 3 markets where consumers are increasingly buying new smartphones?

TL: More people living in far-flung Indian cities are connected to the Internet via Android-enabled smartphones with developments in telecom infrastructure. We aspire to use this opportunity to offer a highly elevated user experience to these newer users and gain brand loyalty from them. Additionally, these developments have also helped create an ecosystem that directly aids the mobile app economy in particular. As per the latest report by App Annie, India is the fastest-growing market for both iOS and Android applications.

The country also leads in the number of mobile apps that were downloaded across both
platforms as app revenues shot up sharply in the first quarter of 2018. All these factors put together create a highly conducive environment for us to operate in India. APUS is delving into online gaming, content and other value-added products based on the software systems to enthuse Indian audiences.

What do you see as the challenge for Android and developers like APUS when expanding into India’s Tier II and Tier III cities?

TL: Since its inception, APUS has been committed to bridging the digital gap, enabling more people to stay connected and adapt to all the latest technologies. It is a big challenge when expanding to the Tier II and III markets. The connectivity to the Internet in these markets is very low, which makes it the biggest barrier for penetration. While smartphones are on the rise, having low to no connectivity hampers the experience one can have while using any Android product.

Internet penetration in India is largely an urban phenomenon even though it is rising. According to the IAMAI report ‘Internet in India’, in December 2017, Internet penetration in urban India was at 64.84 per cent as compared to 60.6 per cent in December 2016. In rural India, on the other hand, Internet penetration was at 20.26 per cent in December 2017, up from 18 per cent in 2016.

What is the difference between APUS Launcher and APUS Launcher Pro? Do you see an opportunity to monetize with the pro version?

TL: The major difference between APUS Launcher and APUS Launcher Pro lies in the personalization. The Pro enables users to tailor-make their smartphone with more themes and emojis. The approach that we have adopted to monetize the pro version will be quite different from the previous version. The new monetization will arrive with the launch of new app in September.

The new monetization approach will be focused on IAP (In-App Purchase), which will have fewer advertisements than any other launcher in the market. The IAP model of monetization refers to the payment made by the users directly for a service they’ve required from the app. In the case of APUS Launcher Pro, the users will enjoy more personalized themes and wallpapers by paying as registered users.

You have partnerships with Hotstar and InMobi. Tell us about them.

TL: First, I would like to take this opportunity to explain why APUS is betting big on the media and entertainment industry in India. As per the KPMG Media and Entertainment Report 2018, the industry inched closer to the Rs. 1,500-billion mark in 2017-18 (FY18). Thanks to a rapidly growing digital user base, the industry clocked a growth of 10.9 per cent in FY18, reaching Rs. 1,436 billion, which had a positive impact on demand across sectors like films, digital advertising, animation and VFX, gaming and music.

APUS has collaborated with content service providers, such as InMobi, India’s largest and the world’s third-largest mobile advertising technology company and Hotstar, the largest online video platform in India, to provide rich and wonderful content recommendations for the users in India. We are always looking for credible partners who would help us take our vision for India forward.

Does APUS see an opportunity to partner with Chinese smartphone makers to distribute APUS Launcher as a default system app on their smartphones?

TL: In the past three years, we chose to recommend APUS products to users by the large global Internet platforms and let users decide whether they would download the apps by themselves.

We are determined to try our best to respect users’ own choices. At the start of the APUS system, we have been aiming to provide a smaller, faster and simpler product for users. We hope to replace the original Android System with APUS System to improve users experience in the aspects of power-saving, security protection, etc. APUS System strengthens the function of accessing the Internet: it integrates browser, news center, app market, games center and search engine into one system, providing a one-stop solution for users to access the Internet.

Then, it needs to go through a complicated process for the phone manufacturers to preinstall our apps, which takes time. Thus, it could not satisfy our need for fast growth at that time. Now, APUS has over 1.2 billion global users. Based on this, we have been starting to get in touch with many phone manufacturers and recommend users our products and services by pre-installation. One of the main reasons is that more and more phone manufacturers are becoming aware of the values that APUS System does for users. As a result, they wish to pre-install APUS System on the original hardware to increase their selling points.

Are Indian consumers different from their peers globally? What do you think would be one key recipe for success in India?

TL: Understanding Indian consumers is a tricky business as they are continually changing and are diverse. Several factors are shaping India’s complex consumption market, which includes consumers’ content consumption patterns, the increasing and substantial impact of digital technologies and emerging trends that could alter consumer demands. It is important to understand these trends to meet our users’ expectations.

It is sometimes hard for global technology companies to assess the demands of the heterogeneous population in India considering the varied consumer demands, expectations and diversity in terms of culture and language. Ever since we launched in India, we have been working towards collecting and analyzing the data of the consumers using our various products, such as APUS Launcher and APUS Browser. We have also been using disruptive technologies such as Artificial Intelligence and Machine Learning, to ensure we provide a personalized user experience to the consumer.

The key recipe to succeed in a market like India is to follow an effective approach of localization, which includes offering your product in diverse languages so that the product becomes more user-friendly. At APUS, we look at strategic partnerships, based on the understanding of what our consumers want. Some of the popular sectors are content, e-commerce and lifestyle, which has led us to establish partnerships with Hotstar, InMobi and Alibaba. All these partnerships have played an important role in our revenue
additions.

Europe is already investigating if Google is forcing its services on Android OEMs. Do you see an option to replace future Google apps and services as a big opportunity for APUS?

TL: APUS System is an enhanced version of Android, which helps global users access the Internet. For the new users of smartphones, the all-in-one solution helps them access the Internet in a faster and more comfortable way. The development strategy of APUS mainly contains two levels: the first one is to realize the continuous expansion of the user-scale, thus providing services for more users; the second one is to build an APUS ecosystem. Currently, we provide Internet-access services to help users surf the Internet, searching and browsing, downloading apps, and watching the news, etc. In the future, we will build an ecosystem based on these users and get more content, including music, video, books and other resources to local users.

Besides, we will establish cooperation with local partners in daily services, e-commerce and financial services, and get the services to our users through the APUS platform. With our leading products, technologies and capital, we hope to help more local Internet enterprises accelerate the local Internet industry and eventually build local ecosystems. We can thus provide local users with deeper value-added services such as content, daily services and e-commerce.

Can you also share your thoughts on the revenue sharing model, which some developers believe needs to be revisited?

TL: Despite the increasing popularity of the Android app and the several opportunities it provides, there are still a few challenges for app developers that need to be kept in mind. A major challenge that Android developers like ours face is fragmentation. Another problem that Android versions encounter is the slow pace of Android adoption. It means many Android users still do not have access to the latest technologies.

There is stiff competition in the android app market, especially in a country like India. Developers continuously need to come up with new and unique ideas. Patent and copyright issues are a matter of deep concern for app developers. The lack of quality checking rules makes it easier for developers to launch new Android apps rapidly. There are many instances when Android app developers are challenged due to patent or copyright law infringement.

Hence, each Android app developer must exercise care and caution to comply with prevailing patent rules. We have been making constant efforts to establish partnerships with players in sectors like content, e-commerce and lifestyle, with an overarching objective to elevate user experience. Getting like-minded strategic players on board is time-consuming as we follow a stringent selection process.

Lately, we have seen non-system apps being exploited to steal critical user information. How do you protect APUS Launcher and other apps from hackers?

TL: As an international company, we give a lot of importance to data privacy. So, we placed strict
requirements for the consent of user data acquisition even before the release of GDPR- General Data Protection Regulation. Therefore, we could meet every requirement in user data acquisition of any country, including Germany, the strictest one. After GDPR took effect, we are making great efforts to meet its requirements in data privacy protection. We also protect users’ data and phone safety through our technology – our innovative products and APUS Cloud.

Among a series of APUS products, APUS Browser, APUS Booster+ and APUS Security
constitutes an “APUS safeguard team”, which provides a series of functions including virus checking and killing, website safety detecting, message safety, WiFi safety, app lock, safe-browsing, AD blocking, privacy protection, etc. We are, therefore, able to create a safe environment for users and protect their privacy. Furthermore, to solve the problem of data storage, we have set up a worldwide APUS Cloud. We are not only storing data in our data centers in Singapore and North America but also setting up APUS Cloud in Europe. APUS protects users’ data more safely and effectively by providing services through various nodes of APUS Cloud.

We are already talking about the post-smartphone era. Where is APUS investing as part of its future strategy, five or ten years from now?

TL: As we await the post-mobile era, it is time to shift our attention from the smartphone hardware itself. It is time to look at all the new things the smartphone will enable. There is a range of examples from drones, smart cars, smart homes, smartwatches and wearable/embeddable technology, and more and serve as examples of consumer technologies emerging from the mobile ecosystem.

  • Published Date: July 29, 2019 8:52 AM IST