Getting set for the app economy

By: and |
Published: July 24, 2015 12:25:26 AM

Mobile applications can bridge the gap between citizens and the governments at various levels to improve public services

With increased adoption of smartphones and deployment of 3G/4G networks, the country is poised for the take-off of an app economy, a new term coined to describe the economic aspects of mobile applications and content.

With 3-5 million signing up for mobile broadband and 25 million smartphone shipments every quarter, the app economy is here to stay.

Alibaba, the Chinese top e-tailer made headlines for clocking about $9 Billion in just a day during the Singles’ day in November 2014. Not surprisingly a significant chunk was from mobile devices.  A latest KPMG report says that e-commerce (through traditional websites on PCs/laptops) will be overtaken by mobile based m-commerce very soon.

It is a trend that is gaining traction with all  e-tailers providing great user experience on mobile devices. Most recently, India’s leading e-tailer, Flipkart, offered special discounts for purchases made using mobile apps instead of their website. In fact, some of the e-tailers are gearing-up to do away with websites and take a “mobile app” alone route.

In general, the mobile app market has grown significantly over the past five years.  Google’s Play Store  and  Apple’s iStore, both boast of over 1.4 million apps. Is there a real market for app developers in India? How does the app economy work?

The apps market in India is likely to grow by more than four times to $626.23 million (around Rs 3,800 crore) by 2016, with paid apps contributing over 50%. Indian Council for Research on International Economic Relations (ICRIER) estimates the total worth of Indian app economy at $150 million currently (about Rs 900 crore), with immense potential to grow further.

An average of 17 apps were downloaded in a year in India per user, out of which 4 were paid apps, compared to a global average of 26 apps, of which 5 were paid apps. India is among the top three countries by the number of app downloads

Interestingly, 80% of apps being downloaded in India are global apps. This may be due to the lack of India-specific apps. Unlike countries like China, Korea, or even Japan, where country-specific Apps are a smash hit like Weibo or KaKaoTalk, India cannot boast of many India specific app with millions of users. Bharti Softbank’s Hike messenger has about 25 million users.

A recent report states that there are over 3 lakh mobile app developers in the country. Over the past few years, quite a few Indian companies specialising in app development have emerged and are successful in developing apps for both B2B and B2C markets. InMobi has just released an engaging mobile advertisement delivery platform competing with Facebook and Google. Some companies have created a niche for themselves by focusing on iOS apps.

UK-based mobile app research company Vision Mobile has some interesting statistics about the Indian market from a developer stand point.  Android has emerged as the primary app development platform with over 56% developers using Android, while 20%  of the developers use iOS.  In terms of revenue model, advertising contributes to about 40% , followed by the ‘pay per download’ of 21% and contract work  and commissioned apps coming in with 20%.

What could be the niche areas for Indian apps? Diversity of languages is a unique trait for India. Firms such as Reverie Technologies have developed platforms for Indian language processing; mobile app developers, especially those related to media could look at creating apps that meet the needs of language diverse demographies of India.

Newshunt, the multilingual news feed platform for example has seen good traction amongst non-English speaking users.

Another area is the development of apps for improving day-to-day life of Indians. Congestion in roads, call drops on telecom networks, overflowing sewage, water shortages are some of the common infrastructural and public utility bottlenecks that we face day in and day out. How about a simple India specific weather forecasting application in local language? This could also be used for emergency alerts regarding floods/earthquakes,etc.

The Singapore government has made significant progress in enabling mobile  app based service delivery.

Singapore’s OneService provides a platform for residents to give feedback to the authorities on all the municipal issues. The ActiveSG app lets the public book sporting facilities and sign up for sports programmes. myENV allows the user to check  weather and related information.

India could adopt mobile app based governance systems. For example, the government had recently shortlisted 20 app ideas from over 9,000 entries with over 50,000 ideas in the PMO app contest—certainly a great initiative to spur innovation among the youth. Let us hope to see millions of downloads and active usage enabling a digital society.

The e-commerce companies are basically trying to provide some smoothness to the unorganised sector through digital intervention.  Similarly, apps can bridge the gap between citizens and the governments at various levels to improve public services.

Kumar is vice-president, Symphony Teleca and Sridhar is professor, IIIT Bangalore. Views are personal

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