The growing advent of the smartphones, along with applications (apps) that run on them is perhaps the biggest technical phenomena in the recent times. The Smartphone has now become the remote control for our lives, with a lot of happening things our way in just a single click through a plethora of mobile apps to choose from i.e., playing games, tracking music, building connects, exploring outlets or food joints, booking cabs, or a seamless retail commerce experience through mobile, thereby, giving a wide array of choices to the technology users
Global Impact- With revenue of USD 86 billion in 2014 and an annual growth rate of 27 per cent, global mobile apps economy is a fast growing segment driving technology adoption across the world. While, the Americas is currently the largest market (with a share of nearly 55 per cent), Asian countries are expected to outpace the growth in terms of app downloads and usage.
I often revolve my thinking hat to understand why mobile apps are identified as an important element for the growth of Indian market? As I was thinking more and more deep, myriad thoughts came into my mind and I narrowed down my beliefs to the gigantic power of a small device which is bringing growth to this ever growing market. India is now at the threshold of entering the second phase of its telecommunications revolution which is centered around the smart communication via mobile devices. And hence, apps are becoming the dominant mode of every digital interaction in today’s world. Apps are intuitive to use due to their single-purpose nature and are often less-data intensive as compared to the internet websites.
What will drive growth in India? - In the context of India, apps can surely play a role in enhancing service delivery. This is indicative of the fact that mobile phones have already penetrated in regions where conventional infrastructure is lacking. And, this puts India in a favorable position to leverage its mobile infrastructure to provide services such as banking, education and hyper local commerce along with other services to many regions (facing paucity of such services) where India lacks the hard core infrastructure.
The key drivers for the app economy–
- Ubiquity of smartphones – With above 130 million smart phones shipment in 2014, India presents a burgeoning end –user market in terms of adoption as well as usage. Smartphone adoption is widening to smaller cities and towns, particularly by people in lower economic groups, as prices in India continue to decline
- Growing access to connectivity – More than 75 per cent of the Indian population is mobile-enabled, a growing base of ~300 million internet users (2nd largest after the US) and a rapidly multiplying online population with an ever growing usage via mobile (~173 million users) is reinvigorating demand and catalyzing growth. The experience of having fast internet access combined with using highly intuitive and flexible user interfaces on today’s smartphones, has become even more of a reality.
- Accessibility via app stores – Convenient access to the ubiquitous world of mobile apps via play stores. India is the third largest country, in terms of number of downloads via Google Play Store itself (according to App Annie), greatly augmenting the usefulness of mobile devices
- Proximity to the targeted user group – Apps offer an extreme personal user-experience which websites are unable to provide. Indian users spend >3 hours on their smartphones with ~33 per cent of the time on apps
- Mobile usage = App usage – An average smartphone user has approx.17-18 apps in India leading to a rise in app usage in the last 2 years (approx. 63 per cent)
Impact of App economy – App revolution is likely to favor the dynamics of India, as a fast growing economy with magnitude of benefits
- India’s app economy is already making its mark in the global arena with signs of success and global interest turning towards the Indian App Economy. Around ~9 billion apps are expected to be downloaded in India by the end of 2015, more than five times the number of apps downloaded in 2012 (1.56 billion)
- App economy is already impacting eCommerce along with emergence of newer areas enabling mobile ecosystem
- Making eCommerce mobile (mCommerce) leading to an intrinsic shift from mobile also to mobile ‘ONLY’ ecosystem, thereby, spanning across regional and income levels
- Fast evolving mobile based payments – Enabling digital financial inclusion through payment platforms across mobiles; Emergence of innovative payments mechanisms such as e-wallets, payment gateways and social payments to boost the financial inclusion
- Government of India digital mission creating further push for mobile enabled ecosystem – e-governance & e-services to common citizens; mobile version of the MyGov.in encouraging citizen engagement in governance, E-education, E-health etc.
- Mobile infrastructure creating opportunities for app developers – India has around 300,000 app developers currently, and is already the second largest Android developer community in the world after the U.S. The country is expected to have the largest number of software developers by 2017-18, thereby, fueling talent needs across the world
- Fostering innovation and entrepreneurship in the ecosystem – Above 60 percent of Indian start-ups are focused on digital solutions, with a large base offering consumer and enterprise apps across categories. India’s diverse demographics has enabled the discovery of hyperlocal delivery apps by young Indian startups serving the growing needs of consumers
- Although, India is still nascent in terms of monetizing revenues from paid apps, it has shown a higher growth in revenue generation over the last year (1.6X) as against other emerging economies like Brazil (1.4X) and Mexico