As per IDC’s smartphone shipment report of India, smartphones have occupied a 35-per cent share of the total mobile phone market – a rise of 13 per cent as compared to Q4 2013. This shows the accelerating growth of smartphones in India. As smartphones and mobile applications go hand in hand, these open vast opportunities for mobile application players. Growth in the smartphone market will give a boost to the mobile application market. The growth of smartphones has made mobile applications one of the upcoming sectors in India as well as globally.
According to ASSOCHAM, mobile app downloads in India are likely to cross 9 billion this year. The availability of an increasing number of Android smartphones at competitive price slabs has contributed substantially to the rising penetration of smartphones in India. For a majority of online Indians, their first access to the internet has been via a mobile device, and for a substantial part of this population, internet access would remain restricted to mobile devices only. The exponential growth that the Indian e-commerce and travel portals have witnessed has been aided further by their mobile apps and this is a testament to their effectiveness in reaching out to a much wider set of consumers and in driving increased engagement.
A mobile app can be instrumental in assisting the growth of business. If the right strategies and tools are employed, mobile apps can help a business understand customer’s behaviour and expectations out of the service being provided. This helps a business channel their efforts in the right direction so as to serve the consumers better and offer a better experience of its services.
India App market
In India, opportunities for mobile app business are immense as new uses of applications are surfacing. India is slated to become one of the biggest players in the global app market by 2016, overtaking leading smartphone app markets such as the US and five Western European Union countries, according to a report by an independent mobile industry market research and consultancy provider, Research2Guidance.
“Likely to touch Rs.3,800 crore by 2016, led by a surge in smartphone sales, the app market in the country is likely to grow more than four times to $626.23 million by 2016 with paid apps contributing to Rs.2,065 crore. According to the Indian Council for Research on International Economic Relations (ICRIER), the total worth of Indian app economy is worth $150 million currently (Rs.900 crore), but it has immense potential to grow. A number of factors favour the app revolution in India, one of them being the presence of over approximately 3 lakh app developers with about 100 million app downloads each month.”
“The paradigm shift of people’s attitude towards Internet-enabled devices is also affecting the way the data is being consumed in the e-domain,” said Praveen Rajpal, CEO, Rockstand.
Apps can be used in a variety of contexts like education, health, entertainment, work, shoping, etc.
“Smartphones and ‘Mobile Only’ Internet users are growing rapidly and India is expecting to double its base of smartphones and mobile internet subscribers by the end of 2015. 60 per cent of the shopping happens on the mobile. It has become important to have a mobile-friendly website or an app. Giving an option to users to transact from any device is the key to success for any business nowadays,” said Kulpreet Kaur, Co-Founder.Shoppirate.in.
“ESPN cricinfo is observing a boom in the shipment of smartphones in the country. In fact, in the last 12–18 months, it has seen a huge consumption of mobile content on cricinfo platform. Cricinfo is prioritizing a lot of work on mobiles ensuring to give the best experience to the consumers. Cricinfo has revamped and relaunched the iOS, Android and Windows version before Cricket World Cup so that consumers get contents in a much better way,” comments Gaurav Thakur, Director – Mobile Products & Revenue, ESPN Cricinfo and ESPN Digital Media, India.
Talking on the same lines, Nirmal K., Assistant Director, Mobile Product, ESPN Digital Media India, added, “We also make sure that we adopt the latest technology that each of the ecosystem offers. We have also integrated with Google to offer Now cards for cricket. We are a privileged partner and first cricketing partner to work with Google now. We also adopt the newer technologies at very early stage so that users can get the best of experience.”
Trends in mobile application
Various applications are available in the market for different requirements of users. There are apps for games, entertainment, information, voice calls, education, travel, e-commerce, social network and even for utility bill payments. Different app users have different criteria. But the most commonly used apps are games and social networking.
“Communication apps are the most popular ones, followed by a variety of e-commerce, online classifieds, games and entertainment apps,” Bhavin Turakhia, CEO & Founder, Riva (Ringo), added.
“Games are the most popular mobile app segment among smartphone users and it makes the most revenue among paid category. The second most popular category after games is social media apps,” Yogesh Agarwal, CEO, Applane Solutions, reiterated.
Rajesh Kaul, Co-Founder & CEO, Triotech Solutions, is of the same opinion, “Social network, games, health and education are primarily the leaders in the application business. These applications are needed to bridge the gap between users and service players. Applications are driving the change and have become important in the day-to-day usage aspect.”
“The key segments driving growth and adoption of mobile applications in India include Social, Local, Games, Commerce, Travel, Utilities and Entertainment,” said Hemant Jain, Co-Founder, Happy Hours India.
Revenue generation
Revenue is the most important part of any business. The app players come up with unique business strategies to attract users. Different players have different revenue generation models.
“Ringo is a pay-as-you-go product. Unlike most international calling apps and systems, Ringo does not expect consumers to opt for a subscription package or a monthly commitment fee to avail our services. At Ringo, we believe in transparency. As such, there are no added or hidden charges associated with international calls made using Ringo,” said Bhavin Turakhia, CEO & Founder, Riva (Ringo). “Our goal is to help Ringo reach out to as many consumers as possible, be it for their personal or business use. We are deploying various distribution channels to help Ringo reach out to its audience,” he added.
Unlike Ringo, Drona HQ has a different approach to its revenue generation.
“Our core proposition to the customers we help them standardize their entire mobility roadmap for the next few years. For example, a company which has 25–30 internal companies has a huge workforce, within every company group they require different apps but if we don’t have standardized approach all employees will continue to build their own apps. Further when an employee purchases a new phone maybe Android or iphone the life cycle will be vanished. It needs to be upgraded, maintained, compatibility as we have no control over it. We license the enterprise mobility platform – Drona HQ. The basic license allows an enterprise with hosting a set of micro apps that an enterprise needs. They can always buy add-ons to host more and more,” said Jinen Dedhia, Managing Director, Deltecs Infotech.
An e-book and e-magazine application like Rockstand has a different approach to revenue generation. “A fixed percentage of each retail is shared with the publisher. It may vary depending on the type of agreement we have entered into with the respective publisher. Several distribution strategies are in place to promote and distribute the content available on Rockstand. There are affiliates, offers, digital marketing campaigns, etc to distribute contents to the target audience. In some cases, a publisher may suggest a distribution strategy for their respective content. In that case, we run a campaign on the same. However, a user can only read on the application as all the content is hosted on this platform,” revealed Praveen Rajpal, CEO, Rockstand.
An offline app provider like HolidayIQ.com has a different revenue model. “HolidayIQ.com follows the core revenue model. People come to HolidayIQ.com for research but after that if they want to book a hotel or holiday packages, etc, we connect them to people who will give them bookings. Every time we pass a customer to the booking agencies, we get paid,” said Hari Nair, Founder & CEO, HolidayIQ.com.
Popularity of Freemium app model
Freemium model started gaining popularity with the rise in social gaming, and although its usage is still largely dominated by games, it has rapidly started expanding to other categories as well. The success of Freemium model can be judged from the fact that 9 out of 10, and 42 out of the top 50 games in the “Top Grossing Segment” on Android playstore are free to play games, which are generating revenue from Indian consumers on the sale of in-game merchandises. This further illustrates that, though the consumer is price sensitive, they are not shy of paying for an item (physical or virtual) where they see some value attached to it.
“Indian consumers are opening towards the paid apps. However, the number is expected to rise with the rising subscriber base of 3G services,” stated Yogesh Agarwal, CEO, Applane Solutions
Praveen Rajpal, CEO, Rockstand, added, “While a fairly strong majority of 83 per cent of the top thousand apps on each of the iOS app store and Google Play – monetize via freemium, an even bigger proportion of revenue generated by those top 2,000 apps arrives via freemium, i.e. 92 per cent.To go from being non-existent just five years back to being one of the most widely recognized and spoken about industries requires something special. The applications or app industry has more than its fair share of specials. So, clearly the freemium model is working in India.”
“For good applications, customers are willing to pay. Different revenue models are been explored like click-to-use model which is tied up with the advertisement model. This model is catching up very fast,” said Rajesh Kaul, Co-Founder & CEO, Triotech Solutions Pvt. Ltd.
Kulpreet Kaur, Co-Founder, Shoppirate.in, is of the view, “Trend is changing. People are willing to pay for better apps which give real benefit to them. Mobile users do understand the extra benefits they get with premium apps and are not that hesitant like before. Moreover, the market is flooded with app users who are sensible and intelligent. They understand the value of important apps and thus are willing to pay for premium apps of their choice.”
Repeating the same view, Hemant Jain, Co-Founder, Happy Hours India, said, “Freemium model has done well with the consumers. Since it follows the classical try-and-buy approach. I am of the view that consumers today are not averse to paying for branded and differentiated – contents and experiences.” He added, “We will soon witness emergence of alternate payment options beyond the standard credit and debit cards. With the growth in smarter access mediums and faster connectivity, consumers are on the lookout for richer experience at their convenience. Hence, I really don’t foresee an issue of consumers not being receptive to pay for useful apps.”
Offline Apps – A new trend in industry
Offline apps are an extension of the online app experience. Cloud technology enables real-time sync in the user data. Offline apps are not restricted to the mobile screen but are also extended onto the PC screen, thereby enabling user’s convenience.
“One of our beliefs is that people may go to a numberof places where they will not get internet connectivity because in India a lot of places are there where internet connectivity has not reached yet. It will be a problem for the people. So, HolidayIQ has launched an app that can work in 1,300 destinations with all information without internet. So, we want to help smartphone users to get information with internet.”
“Our app will work both online and offline. If any person is visiting a place with no internet access, then the user can download information of that particular place before visiting. Then, all the information that is available with HolidayIQ’s server will get downloaded into the smartphone. The user will have full access to that and cannot differentiate between an online and offline app. We have tested it with our users and the acceptance rate is over 90%,” said Hari Nair, Founder & CEO, HolidayIQ.com.
“Offline mode is a good-to-have additional feature to use apps when there is no internet connectivity. With this mode, apps simply allow users to perform certain key/crucial actions, and then as soon as internet connectivity is regained, the offline actions would be synced with the servers. A good example of this would be the Facebook app, that lets you write a post on Facebook, and the post is updated when you are connected to the internet later,” commented Bhavin Turakhia, CEO & Founder, Riva (Ringo).
Though offline apps have some benefits, these have some flaws also. In case of real-time information, a user always needs an internet connection for it. Contradicting the above view, Yogesh Agarwal said, “Offline apps have become the trend because of the added benefits over online app. Firstly, in case of no network connectivity also the apps will work so that the user can get uninterrupted benefits from the app. Also, some of the apps provide full functionality in the offline mode also. Secondly, apps in the offline mode consume less power from the battery as compared to online apps.”
But the online apps are not going anywhere. With online apps, one can use navigation services, watch news, transfer money, make purchases, etc. Developers are now making apps that can be used both online and offline.
Expressing similar views, Kulpreet Kaur, Co-Founder, Shoppirate.in, said, “Businesses need to have omnipresence. An offline mobile solution allows a user the ability to run the app regardless of network availability and gives comfort to users to never go offline. It gives an ease of usage and comfort to the users. Definitely, there is more success rate especially in business apps. But at the same time it has its own plus and negative points.”
Finally…
All said and done, the smartphone market has opened up a parallel market for mobile application players. The application market is still at an evolving stage and vast opportunities need to be tapped.
aparna@varindia.com