Abstract: With the sudden and bewildering changes in the Indian market, how to find opportunities for app export?
The Indian market has tremendous potential with its large population and nearly 500 million smartphone users. But many companies operating in India were caught unprepared by India’s latest ban on apps with Chinese backgrounds. In this article, I will provide insights into the capricious Indian market based on the market policies recently issued by India and the marketing data about Indian mobile apps (non-game) in 2021 provided by SocialPeta, a platform of advertising and marketing analysis.
App Market “Decoupling from China”
According to the news release by the Indian Express and many other mainstream Indian media on 14 February, India’s Ministry of Electronics and Information Technology had an order issued under Section 69A of the Information Technology Act to ban 54 Chinese apps. The banned apps included mobile games like Garena Free Fire and tool apps like Beauty Camera.
The Indian government has made a series of moves to restrict Chinese apps since June 2020. The reasons are multifold. With international conflicts cited as the convenient and obvious reason, the most important reason was that India wanted to boost its local apps. The non-game apps involved in the ban were mostly pan-entertainment products, including the following types: short video, social, selfie, cross-border e-commerce, telecommuting, internet tools, etc. The vacancies left by those apps could be filled by India’s local apps.
Rise of India’s Local Apps
Based on the data from SocialPeta, I have sorted out a list of the top 30 mobile apps (non-game) by download in India in 2021. On the App Store, there were 8 spots occupied by India’s local apps, among which, the food app Zomato was ranked the highest with over 2.5 million downloads and a ranking of No. 13 in 2021. (On the chart below, Indian apps are marked in red while Chinese apps in yellow)
On Google Play, Indian apps were dominant with 15 Indian apps on the rankings. Outstanding among them was Meesho, an e-commerce and social app, which received over 158 million downloads to be ranked 2nd in 2021.
The ban of TikTok in India benefited YouTube Shorts and also led to the rapid growth of many local short-video platforms in India to share the market. There were 3 Indian short video apps ranked among the top 30, ranking 4th, 7th, and 8th, respectively.
(Only 3 Chinese apps are left on the chart)
MX TakaTak, a short video app launched by Mx Player, reported over 126 million downloads to rank 4th in 2021. MX TakaTak version 1.0.1 was released in July 2020 (India announced the ban of TikTok in June 2020) with its name and logo very similar to those of TikTok. MX TakaTak was quite promising and had nearly 10 million MAU in January 2022.
As Advertising Slows Down, India Faces Inventory Competition
According to SocialPeta, the growth of mobile app (non-game) advertisers slowed down in the past 5 years in India. 2021 saw a total of 23,000 mobile app (non-game) advertisers, up 2.34% compared to 2020. It’s predicted that the growth of advertisers will continue to slow down slightly in 2022.
The Second Quarter Saw the Most Ad Creatives
India had an average of nearly 9000 monthly active advertisers in 2021, with a peak of 10,186 active advertisers in September and a generally stable number of active advertisers in each month.
As for the average creatives, April saw the most ad creatives per advertiser, an average of 377 creatives per mobile app (non-game) advertiser. But the average creatives started to drop after April and, after a slight increase in October and November, dropped to an average of 251 creatives in December.
Fierce Competition Among Pan-Entertainment Apps
In terms of app types, office business app advertisers were the most in number, a total of over 2600; followed by shopping app advertisers. Lifestyle apps were the third most; comic app advertisers were the least, less than 30.
Tool apps had the most ad creatives, nearly 1.7 million, accounting for over 17.76%; followed by social and reading apps, accounting for 15.33% and 12.61%, respectively.
With the increasing popularity, the demand for pan-entertainment apps was also increasing. Competition was fiercest in advertising reading apps which had over 2000 active creatives per advertiser, ranking first of all app types; followed by online comic apps and social apps, both had over 1000 active creatives per advertiser.
Let’s look at the advertising cost curves of mobile apps (non-game) on platforms owned by Meta in India. According to the Cost Intelligence on SocialPeta, we can see that in 2021 India had an average CPM of $2.21, up 35% YoY; CPC of $0.16, up 33% YoY; CTR of 2.35%, up 27% YoY.
Based on the current data, Indian apps had increased their presence in the Indian market after Chinese apps were banned. The vacancy left by many highly alternative tool apps was replaced by India’s local apps, and there were even some good replicas of pan-entertainment apps. But in the long run, the lack of strong competitors will be bad for the healthy development of India’s mobile market. India will have to improve its own products to be more competitive to achieve real success.
As for app companies that intend to enter the Indian market, my advice is not to do it rashly when the situation is still uncertain in the first half of the year. Driven by the trend of globalization, economic cooperation between China and India will certainly be reconsidered in the future. The Indian market will still have potential when the political and economic environment is improved in the future.