China’s Online Black Market — Part III: Underground Android App Distribution

Now everyone knows there’re dozens of Android stores in China and the biggest stores are run by Tencent, Baidu, Qihoo, Xiaomi and Wandoujia. And promoting apps or acquiring users has become very expensive.

There are apparently legal ways to get or buy Android app installs or active users in China. App developers can buy pre-installations through mobile device manufacturers, telecom operators (They make custom Android phones by partnering with manufacturers), device distributors or retailers (They’d make sure consumers can’t tell that devices before being sold have been tampered with.), Android ROM porting stores, etc. Also they can turn to those Android app stores or other marketing services.

As competition in mobile app market heated up, Chinese app developers would come up with various shady tricks to get users or pay increasingly higher prices to third parties who use the same tricks or have created more astonishing methods.

Shuabang, or app-ranking manipulation, is one of the early approaches. Widgets created automatically download apps in order to get higher rankings in Android app stores. Also, it’s no secret that many Chinese Internet companies have been secretly installing applications, or misleading users to uninstall competing ones on users’ PCs or, more recently, mobile devices without their knowledge.

Third-party services who charge app developers do so too. Also, they’ve gone far beyond, according to TOMsInsight, a China-based independent research firm whose reports on China’s online black market we’ve been following.

Here are some methods used by the underground channels,

1. Creating thousands of Shanzhai apps, knockoffs. No matter how many users those knockoffs can get, they carry ads or have in-app paid offerings. To attract users, lots of knockoffs use pictures of beauties as app icons or take various approaches to tricking users into downloading those apps.

2. Secretly sideloading Android apps into users’ devices that are infected with malware. If the users gained through the first method are at least real users, those gained through this one are all fake. One compromised Android device must be very busy at night downloading all kinds of apps, opening them and then uninstall them before their masters wake up in the morning. Some go so far as to make purchases with users’ online banking accounts.

Unlike unauthorized charges to users’ phone bill, through which most illegal money was made in 2G era, today’s app distributors have found it’s way easier to make money from app developers than end-users, largely thanks to the fact that venture capital has been chasing mobile apps in recent years and relatively limited channels for app distribution and promotion.

After app developers realized the growth of app downloads or activations, which could be fake in the first place, didn’t mean high retention or engagement rates, the active users became very expensive. The aforementioned compromised Android devices that are busy “using apps” at night are sold as “active users”. In 2013 an Android device infected with malware could generate five times the monthly revenue for cyber criminals than that from feature phones on 2G networks, according to TOMsInsight.

There are Android security services in China, but what’s creepy is some of them like Qihoo are app distributors themselves. The largest app distributors such as Tencent and Baidu offer free security services too, but they don’t seem powerful enough that can get every Chinese user on board and prevent their devices from being compromised.

The next step by some underground channels, given they’ve been controlling many users’ devices, is selling user behavior analysis reports, an interviewee with TOMsInsight said so.

Source : China’s Online Black Market — Part III: Underground Android App Distribution