With the country’s internet growth gradually slowing down, several Chinese tech giants are planning to expand their businesses outside China, and South-East Asia is their first choice.
According to Measurable AI, the Big 3 (iQIYI, Tencent Video, Youku) of Chinese video streaming industry, despite being leaders of the game, show stable curves of paying users. A slight drop from iQIYI and Tencent’s curves could also be observed.
Hence, iQIYI and Tencent are now exploring the South-East Asian market, trying to duplicate its success. In June 2019, Tencent announced its overseas mobile video streaming app “WETV” based in Thailand. This international version of Tencent Video would be responsible to spread the company’s original content to the world.
Soon after Tencent’s announcement, iQIYI publicized its cooperation with Malaysian entertainment agency Astro to export its self-produced content.
Since the video streaming industry in South-East Asia is still developing, there is no dominating player yet, opportunities are everywhere. The popularity of Chinese pop culture in South-East Asian countries also makes SEA the best choice for overseas expansion.
However, joining the SEA is not easy as many potential competitors are awaiting. Various English content-themed platforms also planned to set foot in the SEA region. Netflix currently has 31% market shares in SEA and is starting to create its own customised contents for the region.
We’ll discuss a few of the main local competitors, and the challenges they impose to iQIYI and Tencent Video.
“iflix”, the Netflix of Malaysia
Headquatered in Malaysia, iflix’s service covered SEA, Middle East and Africa. With a similar subscription mechanism as Netflix, a much cheaper price, and contents from Asia, the West and Middle East, iflix satisfies the needs of worldwide audiences. It currently has more than 10 million paying users and around 22% market shares in the SEA market, ranking within the top 10 of the Philippines and Malaysia grossing chart (entertainment app), and top 20 in Indonesia and Thailand.
Hooq: Singaporean based VOD service
As a joint-venture of Singaporean telecommunication company Singtel, entertainment giants Warner Bros. and Sony Pictures, Hooq provides a large variety of international movies as well as self-produced programmes for the local community.
Hooq currently ranks 4th and 6th respectively in the Philippines and Indonesia top grossing chart for the entertainment category, while also ranking within the top 20 in Thailand. Hooq is now working with Grab, the Southeast Asian ride-hailing leader, which allows users to watch Hooq’s videos on Grab’s mobile app.
Viu: Competitor from Hong Kong
Viu is a Hong Kong-based video streaming provider which mainly purchased programmes from mainland China, Japan, Korea and Thailand. Its large amount of Asian contents, especially those from Japan and Korea, help attracted a huge viewer base. Currently, Viu ranks second in the Indonesia, Malaysia, Thailand and Philippines top entertainment grossing chart, third in Singapore, making it the biggest competitor of Tencent Video and iQIYI in SEA at the moment.
Comparatively, Tencent Video (WETV included) and iQIYI have a lower coverage in SEA. At its base camp Thailand, Tencent currently ranks at no.5 on the top grossing entertainment chart, 13 in Singapore. While iQIYI now ranks 1st in Taiwan, 10th in Singapore. And we can barely see them in other SEA regions.
According to Measurable AI, up to the end of July, more than 99% of paying users of the two players are still from mainland China, indicating the lack of penetration of the two platforms in SEA.
In terms of content quality, Hooq and iflix have significant benefits as local companies. With their advantageous location and knowledge of the specific culture, the two companies are able to purchase programmes that suit the selected countries the most. They can even produce their own contents to perfectly meet the local audiences’ taste. Chinese enterprises such as Tencent and iQIYI might lag behind in the local trend, causing challenges to their expansion into the SEA.
However, the lack of knowledge of a certain culture does not necessarily become a weakness. As mentioned, the SEA region has a high acceptance towards Chinese culture, and the Chinese entertainment industry is growing exceptionally well these years. With TV shows and stars gaining popularity in SEA, the evolving Chinese pop culture trend would definitely benefit the development of Chinese video streaming platforms with their whole library of Chinese contents.
Also, Tencent and iQIYI have got plenty of resources to ensure the quality of their self-produced dramas and variety shows, these premium contents can help absorb new fans. Even if spending extra money to customize new shows for each country is out of Tencent and iQIYI’s plan, little helpful tools such as creating subtitles for each local language might be a good way to break into the SEA market.
Another key element essential to a good streaming platform would be its efficiency of updating latest contents. Viu did a great job on this aspect. The app purchased a huge variety of Asian dramas, instead of just Chinese or South-East Asian ones, the comprehensive collection of Japanese and Korean dramas and animes turn out to be one of Viu’s advantages when compared to other streaming platforms.
Other than keeping up with its great range of contents, Viu requires only 8 hours to translate and upload the newest episodes of hit dramas, the impressive speed, alongside with its high picture and subtitle quality, win audiences over.
In terms of speed, Tencent and iQIYI are definitely within the top tier. The two platforms even cooperated with broadcasting channels to update newest episodes as soon as they were aired on television. Lately, iQIYI joint hands with Taiwan Television Enterprise and Gala Television Corporation to air the drama “Before We Get Married”. The app will upload the newest episode as soon as the television broadcasts, so that it members can stick with the trend as close as possible.
According to MAI, since this drama was aired in May, iQIYI’s subscription revenue in Taiwan has been increasing consistently. This shows us how the rapid update of hit dramas can really help to increase the reputation of a streaming platform. To lay a stable foundation in SEA, iQIYI and Tencent may consider cooperating with various local production companies or traditional broadcasting channels to introduce more up to date content at a quicker speed.
Despite tense competition, domestic leaders iQIYI and Tencent have rich resources in hand to upgrade its self-produced programmes, which can make up for the lack of local content. The collaborative projects with off-line production companies can also provide better shows to audiences in a faster way. Let’s see if iQIYI and Tencent Video can continue their success in South-East Asia with upcoming strategies.
About Measurable AI
Measurable AI is your data powerhouse that provides accurate, real-time and actionable consumer insights. By scanning and identifying over 20 Billion actual online spender’s email receipts, Measurable AI transforms them into valuable consumer insights, which updates daily right after the purchases happen.
Cara Lui is a blog-writer specializing in analytical industry trends and new discoveries of Mobile Apps with the assistance of the MAI Insights’ real-time online consumer data panel.
Originally published at https://blog.measurable.ai on August 27, 2019.