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Comment by bigj0n | Hacker News Reader

Why would China be the top market? America has a far bigger GDP and several times larger GDP per capita

Their economy is larger, and yes, bigger GDP than America. Per capita, US still leads, but since I'm not interested in a piss competition here, let me clarify.

The point of my reply was that saying that the US has more money does not explain the fact on why people in the US pays more for software than in the rest of the world, which I believe is the key issue when it comes to a social network ability to monetize international markets. You have rampant software piracy in Latin America, Asia and Europe. At least in the EU, things are better for business software. China is so notorious for piracy that a former head of Microsoft R&D for China said: "In China we [don't] have problems with market share. The issue is how do we translate that into revenue.".

Nowadays software companies in China have found success by giving away free games and selling coins and whatnot. So my whole comparison was that if China has a bigger economy (or smaller/similar if you feel offended by that fact), then how do you explain that even large companies like Microsoft are struggling in that market.

> bigger GDP than America

Source?

http://worldpopulationreview.com/countries/countries-by-gdp/

United States 21,410,230

China 15,543,710

Please check https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) where the World Bank, IMF and the CIA, they all agree China is on top now. But I'm truly impressed how that fact seems to offend people here based on the downvotes these replies get.

PPP isn’t the actual amount. That’s why people are talking rightfully about nominal. Facebook makes money based off your nominal money, not an algo based PPP since it’s not a real number.

All those organizations you mention all agree USA is still on top for nominal GDP.

I unfortunately think you’re projecting with the people getting offended bit.

Ok in there you have a point. I ended up doing some more reading about this and saw this https://bigthink.com/politics-current-affairs/china-worlds-b...

So you are right with the nominal distinction, and if I was wrong about that, then the downvotes probably reflected that more than any opinion of mine.

Even then, when India or China overtake, they’ll still be poor countries in many ways. Only a fraction of their populations will have disposable income at a level that companies can expect to get.

Of course you don’t need all the people in the country to have (disposable) money since their populations are so big.

And companies like PinDuoDuo in China have shown they can become $30B public companies with a profit in 2 years by mainly targeting poorer or more rural Chinese.

"America has a far bigger GDP" It depends on how you calculate it. According to PPP, China has a GDP of 25 trillion vs the US of 20 trillion[1]. Yes, China has a bigger market and bigger GDP. If you calculate nominal GDP, China has ~14 trillion vs the US 20 trillion. US is bigger nominally, but not far bigger.

[1] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)

In the context of talking about how much money you can earn from international markets, PPP doesn't matter.

PPP isn’t at all relevant in this discussion. People like to just bring up PPP like it’s magic, but it’s not. You have to understand the situations in which PPP is relevant and the situations in which it means nothing at all.

Moreover, you have to understand why PPP exists in the first place. Let me give you a hint: it has to do with arbitrage.

PPP doesn’t matter at all for a web company trying to make money from different countries. If a GDP is going to matter. It’s going to be the one based on an actual real number.

Being 40% bigger can qualify as “far bigger”.

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