Flipping the script

Above: A team of technicians at Flipboard's US office . Left: Flipboard's Marci McCue (left) and Alvin Tse are looking to expand into the Chinese market. Provided to China Daily

Developer of social magazine app to set up shop in Beijing with plans to rename popular product

Flipboard, the California-based company that produces the digital social magazine application, is currently hunting for office space in Beijing's Chaoyang district to set up its first base in China, only months after releasing a Chinese version of its popular app.

"China is one of the fastest growing iPad and iPhone markets. With the second largest Apple App Store in the world, it is an important place for Flipboard to be," says Marci McCue, vice-president of marketing at Flipboard.

Alvin Tse, product director of Flipboard Greater China, also says that the company is working to rebrand its app, which currently runs on Apple's iOS system, under a Chinese name to help get the word out.

Flipboard, headquartered in Palo Alto, California, was founded in 2010. It works with publishers and content providers to offer stories in a full-screen magazine layout.

The content provided by the highly customized Flipboard app is based on a user's reading habits. Users can subscribe to categories, such as entertainment, or to news feeds from publishers such as Vogue. It also connects with social networks, allowing users the ability to interact with friends. Two years ago, the app won Apple's iPad App of the Year.

Flipboard launched its Chinese version last December for the iPad. In March, it released iPhone and iPod touch versions in China to attract the millions of iPhone users in the country. One week after the launch in March, the number of total Flipboard users in China reportedly increased five-fold.

The company says it had 8.4 million downloads worldwide, 40 percent of which were made outside the United States. The company's goal is to have 5 million downloads in China by the end of this year. An Android version of the app will be available in the United States this summer and a Chinese Android version will soon follow.

Flipboard, led by founder and CEO Mike McCue, is clearly focused on tapping into the nation's 900 million mobile phone users. Setting up an office in China (it set up its first overseas office in London) and helping to localize the app are crucial for the company's development.

"China is a unique market, instead of simply bringing what we have in the US, we need more localization than other countries," Marci McCue says.

To gain more local content, the company in December partnered with Sina Weibo and Renren, the two leading social networking services that are the Chinese equivalents of Twitter and Facebook, respectively.

Flipboard's Chinese version has three major sources of information: open RSS sources, which means information can be read, shared and subscribed to online; official accounts of news reports on Sina Weibo; and shared information on social networks. The majority of its Chinese content, however, comes from reposts and news updates on Sina Weibo.

"For us, partners such as Sina Weibo are good place to start because they all have local content feeds and local social networks and Flipboard can get to reach more users on Sina Weibo's platform," Tse says. "But we are not limited to Sina feeds because we are adding more and more sources every day, as long as other sources meet our standard, which means good images, fast upload speeds and frequently updated information."

In the US, the company works with about 75 different publications and publishers; in China, it is working to cooperate with more local publishers. Tse admits it will be a long process before the company's China operations builds up a sophisticated network of content. He says Flipboard Greater China is looking to add more content that is relevant to Chinese users.

"This takes time," he says.

Content, however, isn't the only attraction to the app.

"The 'cover story' (aspect) is one of the key updates for Flipboard, which can display different news to users based on their reading habits," says Tse, adding that the app will automatically select stories and topics according to a user's previous reading selections. "The more time you spend on Flipboard, the smarter Flipboard will be."

China already has similar magazine-format mobile applications in Xianguo, based in Beijing, and Zaker, developed by Dooland.com, a company in Guangdong province. According to company figures, Zaker has 4 million users - 15 percent are daily active users and nearly 60 percent are monthly active users. Zaker expects to have 12 million users in 2012.

Aside from battling Chinese companies for users, another disadvantage for Flipboard is its overseas servers. Tse says that high costs prevent them from moving the company's servers to China, which has directly affected users.

"Other players have local servers which have faster download speed; we noticed that this is a big problem in China and we are trying to improve this by adopting service from local partners," he says.

Not everyone, however, is on the Flipboard bandwagon.

Li Yanyan, an analyst with Analysys International, a Beijing-based consulting firm, says that customized reading based on social networks is still developing with barriers mainly in creating market awareness.

"We have to admit that customized reading apps are not that popular in China; the reading model still has a low consumer-awareness among Chinese users," Li says.

"Companies do not invest enough money in marketing, so it still takes a long time to cultivate the market."

Tse says Flipboard won't invest much in offline or online ads so it can focus on the mobile platform.

Nearly 10 percent of its staff is working to grow its market in China. Though making a profit hasn't been high on the priority list, it is testing a new business model in the US that will charge fees to publishers, not users. Flipboard Greater China is expected to adopt the same model.

One of the company strengths, says Mike McCue, is its ability to help publishers improve and present their content layouts on the iPad and iPhone.

"With full-page articles and images, those stories have full-page advertising inventory that the publisher can sell to their advertisers; Flipboard works with publishers on a revenue share model," says Marci McCue, who refused to disclose commission rates.

She says that the enthusiasm for luxury brands in China may give the company a good opportunity to generate higher cash flow.

"That's another reason we love China because those luxury brands love the Chinese market," she says. "By displaying beautiful ads on Flipboard, we will not worry about profits."

Contact the writers at suzhou@chinadaily.com.cn and linjingcd@chinadaily.com.cn