India has been recognized as the fastest growing mobile app market in 2018. Indian mobile app downloads and revenue have been surging in both Google’s Android Play Store and Apple’s App Store. India has the most number of mobile app downloads across both platforms according to App Annie, the mobile market data and insights company. The booming mobile market in India can be contributed to a few factors, both macro and micro.
Reasons for expansion
The Indian government is ambitiously pursuing its Digital India program. Its vision is to transform India into a digitally empowered society and knowledge economy. They have expanded e-Governance projects and plan to transform the entire ecosystem of public services to information technology. This has caused great advancements in India’s digital profile. In 2018, India’s smartphone users (456 million), mobile phone connections (1.2 billion), and internet users (478 million), all saw sharp increases.
Secondly, Indian telecom companies have started ‘free unlimited data’ offers. The Indian giant Reliance Jio started a data rush offering 28 GB plus 5 GB of extra data for users who sign up for prime membership, which is a one-time fee of Rs 99 (<$2). Rivals such as Airtel, Idea Cellular, and Vodafone all followed suit. This rapid expansion of broadband services is contributing to the change in consumption habits. The average data usage per subscriber grew 25 times from 62 MB per month in 2014 to 1.6 GB per month in 2017, according to data from the Department of Telecommunications.
India’s population is entering the Internet age ‘mobile first’. Millions are adopting the internet through their mobile phones, and for many people, it is their first mobile phone. The Indian smartphone market has been growing rapidly. In 2017 it witnessed a healthy 14% annual growth rate. It shipped 124 million units that year making it the fastest growing market globally, firmly remaining the third largest smartphone market. Low-cost smartphone makers are taking large swaths of the market, with Chinese vendors collecting a 53% share.
This combination of state initiatives, low-cost internet access, and low-cost smartphones lead to an expanding mobile phone market, and subsequently, mobile app market.
Show us the facts
According to the mobile report by the Internet and Mobile Association of India, in 2017, the country’s internet user population was 281 million (expected to reach 500 million in 2018) with 62% being in urban areas. However, the smartphone population itself became greater than 300 million. These numbers surely solidify the ‘mobile first’ trend in India.
India, being the fastest growing of any market, saw a Q1 year over year revenue growth of 41%. Indonesia came in at a distant second with a 24% increase. According to App Annie, India was the number one market globally by combined downloads on iOS and Google Play, ahead of the United States (second), and China (third, iOS only).
While the rate of revenue growth is surging, the absolute revenue generated ranks India 29th globally. Sales from mobile apps sit at a modest $47 million. The top spenders globally in Q1 2018 were the US – $3.2 billion, Japan – $2.7 billion, and China – $2.4 billion (iOS only). Clearly, India has a long way to go before ranking top 10 in revenue.
Fortunately, there are even more than market trends that give India the potential to reach much higher revenues in the future. Indian mobile users are avid app users. The average user in India has nearly 80 apps on their phone and accesses over 40 of them each month. Globally, the time spent on apps spiked by 30%, meaning each user spends about 43 days per year in apps.
In Q4 2017, Indian app users spent a collective 50 billion hours in apps across Google Play, iOS, and third-party Android. The top three apps downloaded in India in the first quarter of 2018 were content and video streaming apps. The top two most popular apps were Netflix and Tinder.
India, being the world’s fastest growing and second largest market, is a major player in the global app economy. The current growth numbers show no signs of slowing down, bringing much excitement to this emerging market. As time moves forward, internet adoption and mobile adoption numbers will only increase. The data initiatives and low-cost smartphones will continue to be drivers for the domestic app economy. As India’s economy develops, user spending will increase as well – something that’s greatly needed for the 29th ranked revenue generator.