Rise of App Economy in India



Rewinding back to mid and the late 1990’s, almost every company had a website to reach their customers. Today the scene hasn’t changed much except for the transition from these cluttered websites to user-friendly mobile applications. The rise of mobile applications can be credited to the ease access that it offered to the customers. In today’s scenario, the need for a mobile based application is as great as it did for a website 20 years ago. Mobile based applications have furthered the extent to which technology can ease our life.

India in spite of still being addressed as a Developing Nation, we are the fourth largest app economy in the world with numbers speculating that app downloads may cross 20 billion by the year 2020. The facts do check with more people relying on apps more than websites. Statistics say that about 97% of users in India rely on these mobile applications over browsers and websites. Another interesting demographic suggests that about 25% of the population in India use ride-sharing applications such as Rapido, Uber, and the like for everyday commuting, putting India at first in the ride-sharing segment as compared to other countries across the globe.

In undeniable that apps have become an essential part of our daily lives. It lets one book a ride, order grocery, pay other people, recharge phones etc. with much ease. The ‘Make in India’ programme by the government of India also plays a vital role in boosting our app economy. Despite a looming unemployment problem, rising app economy in India is expected to provide around 1,00,000 employment opportunities in the current fiscal year of 2017-18. Estimates value of India’s app economy to be of Rs 2,000 crore having more than 3,00,000 developers across the country. Of which Bengaluru, Mumbai and Delhi having the maximum number of developers when compared to other cities.

The major challenge that app developers in India face is monetizing their idea into a successful revenue. Incidentally, Most of the Apps listed on Google Play are free which mean developers earn major money through advertising. But in India, 60% of the total internet users hate Online Ads and the other 40% are least bother about them. The current business model of applications in India is based on a hit & trial model.

The present revenue rate of apps in India is poor, which is one of the most crucial aspects where all entrepreneurs have a great concern for. Another huge challenge posting the industry is high customer acquisition cost. About 90% of customer acquisitions in India are discount-driven acquisitions & the average acquisition cost per customer is somewhere in the range of Rs. 80-120.

It’s interesting to see how the application industry in growing despite such harsh conditions. The big answer to look forward is how our app economy shall grow in the future with the current revenue models.


Mobile App Market In India: World’s 4th Largest App Economy Now

India’s growth rate to be more than China

When compared with India’s total app downloads per year, only China, US, and Brazil are ahead of the developing nation. The annual figure for India is expected to grow by 92% which will amount to 7.7 billion downloads this year and by 2020, this figure will rise to 20.1 billion.

As compared the app download in China is expected to grow at as slow as 29% this year. However, China’s absolute figure will be 49 billion which means it will be more than six times of India’s figure.

“With the introduction of affordable smart phones and better infrastructure supporting mobile, and given India’s population, the growth here is expected to be significant,” Junde Yu, MD of App Annie APAC.

According to Junde Yu, the most important thing that is now driving the app economy here is the amount of time spent by the users on the mobile app and not the revenue or the number of downloads.

In India, the amount of time spent on apps in the first quarter of 2016 has increased more than 2 times as compared to that in the first quarter of 2014.

 Retail apps, video streaming apps, ride-sharing app will continue to grow

India has seen a major rise in the time spent on retails apps. Mathematically speaking, the amount of time spent grew by 11.5 in the first quarter of this year as compared to that of 2014. The retail apps market is largely driven by e-commerce giants like Snapdeal, Amazon, Myntra, Flipkart and MarketApp.

Whereas time spent on video streaming apps rose by 7.4 times with Hotstar and YouTube heading the way.

“People have this perception in India that users spend more time on browsers. That is not true. Our data shows that the percentage of time spent on apps in India is the same as around the world, at 93% (the remaining 7% comes from mobile browsers).”

Why India’s app market is growing?

There is a misconception with regard to time spend on browsers by Indians. The data by App analytic company shows that the percentage of time spent on apps in India is the same as around the world that is, 93% and the remaining 7% comes from mobile browsers.


India’s initiative to maximize the growth in app market

There is a need for the Government to make policies that are aligned with the application development market in India in order to enable them to take a leadership position along with maximizing the revenue.

Along with India being the world’s second largest user of applications, it might become the largest developer base.



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