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Through the Magnifying Glass: India

Date

22/09/2020

Written by

Airnow

Will India’s app market be the biggest in the world?

India’s app economy is maturing rapidly and is showing signs that it is going to be the biggest in the world. Although China possesses the largest market in terms of usage and revenue, and companies in the USA are arguably leading in terms of innovation, India is now top of the charts when it comes to the number of apps installed and used per month. In fact, the country has racked up a huge 19 billion apps downloads in 2019, putting India top of the app download charts. While the Indian market’s growth has been fast, it is not surprising considering it has a population which is beaten only by China.

India’s massive population of 1.35 billion people means it dwarfs rivals such as the United States in terms of its app market potential. What’s more, despite only 36% of the Indian population currently owning smartphones, this still equates to almost twice as many actual devices in use in India compared to the USA - 502.2m v 260.2m.

There is a problem, though, while emerging markets such as India tend to have high downloads of apps, consumers are often reluctant to buy, resulting in decreased revenues. This is because consumers are trying and testing many apps. However, as time goes on and the market matures the revenues start to increase. This is due to consumers having more time to assess apps quality and utility and they consequently become more willing to part with their hard-earned cash on products which they deem valuable. This is good news for marketers as consumers at this stage represent an increased opportunity for monetization through in-app purchases, in-app ads and subscriptions.

This means India has the greatest potential for its app market worldwide as its incredibly high rate of downloads of apps - 19 billion and counting - will soon turn into revenue. But it’s not all potential, India’s app market is maturing rapidly, and it is already a force to be reckoned with. Revenue is expected to show an annual growth rate (CAGR 2020-2024) of 13.4%, resulting in a projected market volume of US$461m by 2024. But don’t worry, the floodgates have only just been opened and there is still time to join the wave.

There are some other factors that also add together to make India a lucrative market:

Mobile orientated

Users in emerging markets are heavily reliant on their mobiles, and India is no exception. According to a Meeker’s report, 65% of people accessing the internet in India did so from a mobile device and 41% of e-commerce in India takes place on mobile. This makes the app market even more important in India.

A country open to the West?

There is also another notable trend pointed out by Forbes, just 19% of India’s app market today comes from outside India and China. This is a huge opportunity for western ad developers and marketers who can present western apps to a new audience. This opportunity will surely grow in light of recent tensions between India and China which has led to the de-installation of millions of Chinese apps by Indian citizens.

Gaming

As other forms of entertainment such as television are experiencing declines, the gaming sector is getting bigger and bigger. Growth is even stronger in terms of the mobile gaming market. The accessibility of mobile gaming is what is bringing it to the pinnacle of the gaming industry. All you need is a smartphone and a stable internet connection to play. The proliferation of affordable Chinese-made mobile devices, as well as the availability of cheap 4G, has unlocked the world of mobile gaming to millions of Indians. Recent reports show that around 85% of revenue in gaming in India is generated through mobile gaming.


Opportunities

So, you can see that India is going to be the next best thing in terms of the app market, but why does this represent an opportunity for app developers?

Increased revenue

Huge increases in smartphone possession have inevitably increased app use. Mobile app marketers should take advantage of this huge opportunity the Indian market presents by growing their market base and monetizing apps. Statista reported that mobile advertising expenses were over 52 billion rupees in 2018. That number will only have grown in 2020.

Top downloads apps on the Play Store 2019

Limitations

Despite the current cost per install rates being low and advertising cheap, some challenges remain with the Indian app market. Users in emerging markets are not only reluctant to spend, but they also tend to uninstall apps a lot. Forbes reported in 2018 an uninstallation rate of up to 32% within the first 30 days. This is a result of the popularity of inexpensive smartphones having low storage space which means users must delete apps to accommodate for new ones. This creates a brutal one-in-one-out system for apps, adding another dimension to the already saturated market. These circumstances make it near impossible to gain significant traction on your mobile app through organic installations alone.


Wrapping up

India has overtaken the world in terms of app installations. It is still, however, early days in this nascent app economy and consequently, the revenues are not as high as the mature markets of the West. But this will change, and to some extent it already has. The huge population of India and its massive economic growth means that its revenues will outgrow that of the United States’, Europe’s and probably both of them combined. This knowledge is gold dust for global app developers and publishers. If you have not included India in the marketing strategy for your app, the time is now.

To learn more about what’s driving the growth in Indian app adoption, signup for Airnow Data. To understand how you can launch your app in India, get in touch with Airnow Distribution.