Taking root in emerging markets and waiting for the demographic dividend to break out need enough patience. Netease seems to be making such a long-term choice.
The largest city in ASEAN: Jakarta, the capital of Indonesia
Ng report / in the tide of domestic game manufacturers going to sea, the actions of Tencent and Netease attracted special attention, while Netease, with R & D as the core, was particularly decisive when going out of the sea. Since the success of operation wilderness in the Japanese market, Netease has regarded the Japanese market as the second main battlefield after China, and began in-depth operation. New products continue to be first released in the Japanese market, In order to completely stabilize the Japanese market.
After Japan, where is NetEase’s next stop? Recently, a recruitment information from NetEase exposed NetEase’s goal: Indonesia.
In this recruitment map of Netease recruiting posts related to overseas distribution, in addition to the currently known locations in China and Japan, Netease has opened three posts of overseas distribution manager, overseas online marketing and overseas media specialist located in Jakarta, Indonesia. At the same time, the recruitment information shows that Netease has also newly set up the post of overseas Localization Specialist in Indonesian in Guangzhou.
In other words, Netease has prepared to explore the Southeast Asian market, and has set up its bridgehead in Indonesia, known as "the country of thousands of islands".
Consolidation of ten ASEAN countries: what are the advantages of Netease in Indonesia?
Why does Netease choose Indonesia in Southeast Asia instead of neighboring South Korea and Europe and America in the third battlefield?
There are many reasons. Take South Korea as an example. The Korean market is currently becoming mature and is too familiar to Chinese manufacturers. NG believes that NetEase's domestic team and partners can take into account both. Second, South Korea can be called Tencent's second mother base, and a large number of top Korean game manufacturers have been tied to Tencent's investment, and now they can't get a bargain; Third, South Korea also has the South Korean restriction order that everyone knows that has not been lifted so far, and there are many uncertain factors in the future.
Let’s look at the European and American markets. The distribution strategy of the European and American markets is relatively transparent and routine. At present, NetEase has no major products that operate across time zones, and the deep localization operation has not yet been put on the table. GameLook believes that this will be NetEase’s next plan and there is no hurry in the short term.
From the perspective of product market matching and market potential in the future, Southeast Asia is an inevitable path for Netease. But ASEAN has ten countries. Why Indonesia? This is because Indonesia is the best option at this stage.
Population structure of Thailand
Currently, the total population of ten ASEAN countries is 600 million, close to half of China. Among them, Indonesia has the largest population in ASEAN, reaching 260 million, ranking fourth in the world after China, India and the United States. The population of one country in Indonesia accounts for 40% of the entire ASEAN population. Compared with Thailand, it has become aging and the Indonesian population remains relatively young. It is estimated that the population of Indonesia will expand to 350 million in the future.
Not only is the first in population, Indonesia also has the largest GDP in ASEAN. In 2017, Indonesia's GDP was US$1.01 trillion, accounting for about 37.14% of the entire Southeast Asia GDP, and it has a huge single market. Although Indonesia's per capita GDP is not high, only US$3,859, ranking fifth in ASEAN, Indonesians are accustomed to consumption ahead of schedule and their consumption capacity is higher than those on paper.
In addition, Jakarta, the capital of Indonesia, is the largest city in ASEAN and the economic center of Indonesia, with a population of more than 10 million. Although the per capita GDP of Indonesia is only 3800 US dollars, the per capita GDP of Jakarta SAR has reached 16000 US dollars. It is also a small city in China. Netease is right to put its office in Jakarta.
Indonesia is not only an important game market in Southeast Asia, but also a battleground for global technology companies. For example, domestic mobile phone manufacturers such as oppo, vivo and Xiaomi, which are familiar to game companies, are generally rooted and developed in Indonesia. If they cooperate with game manufacturers, they can completely copy the Chinese model into the Indonesian market.
Finally, although there are more than 200 national languages in Indonesia, there is a national common Indonesian language. It should be noted that Indonesian and Malay are essentially a language (dialect difference), which can be easily extended to the Malaysian market with a population of 30 million and the Malay population of Singapore. The three-level, two-level, two-level, two-level, two-level, two-level, two-level, two-level, two-level, two-level, three-level, two-level, two-level, three-level, two-level, three-level, three-level, two.
Netease products highly match with Southeast Asia market
All of the above are the advantages of Indonesia, while the advantages of Southeast Asia lie in that Southeast Asia has always been the backyard of Chinese manufacturers for a long time. A large number of Chinese manufacturers, such as Efun, you Zu, Kunlun, cardio, hero entertainment, etc., have made achievements in Southeast Asia.
After the rise of mobile game e-sports products, Southeast Asia has a special significance for Chinese companies. In recent years, a number of high-DAU and high-MAU products have been born in the Southeast Asian market, such as Mootong's "Endless Showdown", SEA's Free Fire, Tencent's "Legend Showdown" and "QQ Speed Mobile Game", etc. Their first stop to make a fortune overseas is Southeast Asia.
Southeast Asia market is characterized by relatively low ARPU, but large-scale users and low purchase volume. For MoBa, tactical competition and other competitive products, the products that need a large number of active users are undoubtedly manna. The product form of Netease is a perfect match for the Southeast Asian market. Netease can quickly export the successful products in China and Japan to the Southeast Asian market after localization.
Moreover, from the action of Netease e-commerce next, we can see that e-commerce has become one of the main strategies of Netease. In addition to fighting with Tencent in the domestic market, it is also a good choice to explore the global e-commerce market.
As Southeast Asia is the most densely populated region in the world, a popular e-game in Southeast Asia is easy to gather users from all countries. If the product is stable in Southeast Asia, it will be equal to the achievement of "global e-game product", "global uniform" and so on. It is easier to set up a global competition.
In addition, Indonesia has become a gathering place for international technology and Internet companies in the past two years. Netease has set up a site in Indonesia. In the future, it is possible not only to carry out mobile game business, but also to land other businesses in Indonesia.
In addition, in an interview with Beijing in April this year, Indonesian minister said that Indonesia has begun to share the results of the "Belt and Road" cooperation. Starting from Indonesia as the starting point to conduct business in Southeast Asia, it is also a rational choice to respond to policies and follow the trend. At the same time, compared with the Philippines and Vietnam, the risk of policy fluctuations caused by diplomatic relations is lower.
Netease is going to put a long line to catch big fish
For other Chinese game manufacturers in the Southeast Asian market, NetEase's growth and rooting in Indonesia may not be very good news, which means it will directly compete with the giants.
In the past, Tencent products also flourished in Southeast Asia, but so far, Tencent has not directly involved in the local game operation in Southeast Asia, but looking for agents to be responsible for the distribution and operation, such as legend duel, crossing the line of fire and QQ flying car tour. In Southeast Asia, Tencent is distributed by Garena, the game business brand of sea group of "Southeast Asia Tencent".
Indonesia, Southeast Asia, and even India, Africa and other developing countries, on the face of it, the market size is not large, seemingly weak, but the potential is promising. From the income of 1-2000 yuan per capita per month, Indonesia is more like China more than a decade ago, quietly dormant, waiting for the market to mature.
NetEase has begun to make plans in advance and make long-term plans. After experiencing the chaotic battles in the mature market environment, domestic manufacturers have actually discovered that in this era, the demographic dividend can no longer be based on luck, but has to wait and get it out, and cannot be picked up ready-made. This is true for emerging countries and regions with large populations such as India, Indonesia, and even Africa and South America.
As China's demographic dividend fades and East Asian countries face aging problems, it takes enough patience to take root in emerging markets and wait for the demographic dividend to explode. NetEase seems to be making such a long-term choice.
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