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The Indian App Economy: Breaking Through the Challenges

Date post: 28-Oct-2014
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Microsoft estimates that 10 percent of all the apps in the world are made in India. India is the third largest download market for Google's Play Store and is fastest growing mobile phone market in the world. India's phenomenal growth rates, skilled pooled of IT professionals and talent for Base-of-the-Pyramid innovation, uniquely places it in a position to leverage the app economy to enhance service delivery & developmental outcomes. This is why the next break-through in the app economy is expected from India. However, the ecosystem has bottlenecks. This presentation outlines the opportunities and challenges that exist within the Indian app ecosystem and outlines some of the business model innovations.
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THE INDIAN APP ECONOMY By Rajat Kathuria & Sugandha Srivastav
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Page 1: The Indian App Economy: Breaking Through the Challenges

THE INDIAN APP ECONOMYBy Rajat Kathuria & Sugandha Srivastav

Page 2: The Indian App Economy: Breaking Through the Challenges

India’s App Economy: Currently an Urban Tale

Google: Our Mobile Planet India (2013)

Page 3: The Indian App Economy: Breaking Through the Challenges

But with Enormous Potential...

10%

81%

9%

Smartphone

Feature Phone

Multimedia Phone

Source: Nielsen Mobile Insights (2012)

• 150 million USD

Total Worth of Indian App Economy

• 100 million App Downloads per Month

• 300,000App Developers

Projected Revenue from Paid Apps in India (rupees crore) 89%

percent increase in the number of smart phones in urban India from 2012 to 2013. Total: 51 million smart phones

Page 4: The Indian App Economy: Breaking Through the Challenges

The Second Phase of a Telecom Revolution: Content

India’s teledensity is 73% will reach 100% by 2015.

Mobile Phones have penetrated nearly all income strata.

Next Step: Exploit this connectivity to address India’s high

service deficit.

ICT for Development e.g. MOOCs, m-Health, m-banking, e-governance etc.

Page 5: The Indian App Economy: Breaking Through the Challenges

Why apps in ICT for Development?

Apps are intuitive to use due to their single-purpose nature .

Often less-data intensive than internet sites.

Will gain prominence as smart phone penetration rises.

Have the ability to create a significant number of jobs.

Page 6: The Indian App Economy: Breaking Through the Challenges

The App Economy’s 3D Framework

Source: Made by the Authors

Page 7: The Indian App Economy: Breaking Through the Challenges

1st D: How to Bolster App Development

Weak user interface design

App developer teams in India must employ not only software engineers but also design professionals and psychologists so that an in-depth understanding of visual aesthetics and user behaviour is achieved.

Lack of locally relevant content.

Need local app distribution platforms that provide 70-30 revenue shares to developers.

Network coverage and capability must improve within the interiors of the country where the demand for highly localised apps is greater.

App developers will need to collaborate with OEMs to ensure that localised apps, which may require hardware support for Indic scripts, function well across a variety of devices.

Government can offer technical and monetary support to apps developers and distributors who are designing apps that serve a public good.

Telecom operators may have a role to play, provided they offer competitive revenue shares to app developers, in facilitating mobile payments since they cater to a large prepaid segment.

Page 8: The Indian App Economy: Breaking Through the Challenges

2nd D: How to Boost App Distribution

The problem: The most popular app distribution platform in India is Android’s GooglePlay. International app stores do not lend themselves to the easy discovery of highly India-specific/regional content.

Need business model innovation on the app distribution side.

Case Study: AppsDaily

AppsDaily sells its own apps through physical outlets that are located across 140 cities in India.

Circumvents unfavourable mobile-payment regulation by allowing payments in cash.

Makes the process of obtaining apps easier for those who are less digitally literate or aware by having physical attendant at stores.

62%21%

8%

5% 3% 1%

Android

Symbian

Windows Phone

Windows Mobile

RIM

iOS

Share of Purchases for India, Fieldwork: Sept-Oct. 2012 Source: Nielsen Informate Mobile Insights

Page 9: The Indian App Economy: Breaking Through the Challenges

3rd D: How to Unlock Latent Demand

Increase:

Digital Literacy

Awareness

Gender Parity

India China USA UK

8061 53 45

2039 47 55

Male Female

India China USA UK

13%

84% 83%68%51%

14% 12%26%35%

2% 6% 6%

Advanced Data User SMS/Voice UserVoice Only User

Source: Mobile Youth Around the World, Nielson (2010)Source: Mobile Youth Around the World, Nielson (2010)

Page 10: The Indian App Economy: Breaking Through the Challenges

Business Model Innovation in Monetisation

The Freemium model

Subscription model

In-App Purchases

Advertising

In-App Advertising

Page 11: The Indian App Economy: Breaking Through the Challenges

Improving the Overall App Ecosystem

Seed capital Innovation Network Infrastructure Penetration Consumer Devices Affordability Operating System Fragmentation Policy Framework M-Payment & Spectrum

Efficiency Socio-Economic Condition Usage

For more details on the above, please read the report!

Page 12: The Indian App Economy: Breaking Through the Challenges

Bottom Line

Mobiles for Entertainment Mobiles for DevelopmentIndia can do better & apps can help.

But All Stakeholders Will Need to Contribute as shown in 3D framework.

M4D per million unique mobile subscribers

Source: GSMA Intelligence Country Overview: Sri LankaData: MDI Products and Services tracker, MDI Analysis

Page 13: The Indian App Economy: Breaking Through the Challenges

The Way Forward & Conclusion Focus will be on urban market till saturated – low-hanging fruit.

Cater to the domestic market by focussing on localised content.

Aim for international competitiveness through innovation:

The ability to search for in-app content without downloading the app. Apps that allow for a new degree of device customisation. Apps that replace previously paid-for-services.

The app economy must be strengthened by increasing consumer awareness, enabling the growth of local app distribution platforms and incentivizing app developers to create locally relevant content so that apps can penetrate new regions. These initiatives will only be successful if network coverage and capability increase as well.

Page 14: The Indian App Economy: Breaking Through the Challenges

One Small Presentation is Not Enough

Contact us for more information!

Rajat Kathuria: [email protected] Sugandha Srivastav:

[email protected]

Thank you!


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