Asia is a Gold Mine for Android App Developers and Here's Why
|Paolo Rizzardini in Monetize Wednesday, June 18, 2014|
The Asian consumer and the smartphone
The Asian market has a strong affection for smartphones, tablets and all manner of other internet-enabled devices, more so than any other region in the world. In a recent survey (Milward Brown AdReaction: “ the daily distribution of Screen-Minutes across countries” published in KPCB report) that analyzed the time consumers spend engaging with content across different platforms (including TV, PC, smartphone and tablet) five of most mobile-centric countries were in Asia, with Indonesia, the Philippines and China topping the chart in terms of screen usage.
Yet despite the wide variety of internet-enabled devices now available, the majority of on-screen time today can be attributed to smartphone users, responsible for 181 minutes per day in Indonesia, 174 in the Philippines and 170 in China. Tablet devices account for a high percentage of usage too, which together amounts to strong evidence of how important the APAC region is for the mobile app and services ecosystem overall. And with the Android platform’s strong foothold in this market it is now widely recognized that Asia represents a gold mine for US app developers, but only for those who have the necessary tools to take advantage.
There are several reasons why the APAC region is such a hotbed for app developers, but a good starting point for a better understanding can be found in analyzing the intimate relationship Asian consumers have with their mobile devices. In many cases, these devices are their main tool for communication, entertainment, access to information, learning and, of course, mobile payments. In fact, in the Asian region, credit card penetration is still quite low across the board.
According to recent World Bank statistics, credit card penetration varies from just one per cent in Vietnam and Indonesia, up to 12 per cent in Malaysia. With the exception of more developed countries like Singapore (where credit card penetration has reached 37 per cent) the majority of Asian countries are unbanked, which favors the adoption of alternative payment methods and particularly mobile-based payments – spanning everything from the traditional premium rate SMS to more modern alternatives like carrier billing.
With so many different use cases for having a smartphone as their main device, it’s easy to see why device penetration figures in APAC are already exceeding the impressive numbers for 2013. A recent forecast by industry analyst firm IDC found that the Asia-Pacific region will be responsible for one billion shipped devices per year by 2017, mostly due to low average cost of Android smartphones. Evidently, this exponential growth represents a huge opportunity for US app developers – as well as those from all around the world – who decide to focus their time and resources on Asia.
The app developer and the Asian app consumer
So what options are there for a developer to make the most of their app in Asia? Well, publishing on the Google Play store is a must, but it’s not enough on its own. In the East, a major obstacle to targeting Android users is the fragmented app distribution market. With a variety of mobile operators and publishers offering their own app stores, it is not simply a matter of making your app available on Google Play – there are many different options available regionally, and in some cases there are even country-specific examples.
A developer looking to take advantage of the potential in the Asian market should consider the best possible combination of those channels to ensure maximum impact. After all, the benefits of publishing on independent app markets and mobile operator app stores can be huge, as some of these hyper-local stores can provide developers with higher payouts and marketing support. They are also a powerful way for the most interesting apps to stand out, especially when compared to the crowded Google Play store.
However, the fragmentation of the app distribution market alone is not as much of a problem for app developers as content monetization. When it comes to mobile payments – which is certainly the most interesting option for the Asian region – Google does not provide widespread carrier billing coverage. This makes it impossible to capitalize on the full potential of vastly unbanked regions like Indonesia, Malaysia, the Philippines, Vietnam, and China (Google Play list, April 2014) in particular, which has some 270 million Android daily active users (Baidu data). The inability to monetize this huge user base is a major setback for any app maker with an interest in Asia, and is yet another reason to consider alternative publishing options and payment channels.
Even if China or the other Asian countries mentioned are not yet a priority, every app developer should already be thinking about Japan. At present, Japan is the leading market in mobile app consumption, overtaking the US in October last year. Gaming is the most lucrative mobile app segment: Android games are downloaded six times more than the global average and twice as much as those on iOS.
Japanese consumers enjoy mobile games and that’s why Japan, even with a population that’s only a third the size of the United States, has a much greater ARPPU - $50 ( Ad Japan, Inc. data). And according to data from ¥Coins – the only monetization and promotional channel available in Japan for international content providers, launched in December 2013 – the claims of huge digital content spending can be even greater. The average ARPPU of a ¥Coins user in April 2014 was $72, for example.
By combining the right approach with identifying the right distribution channel, making money in Japan is not as complicated as it might seem. It's true that localization is a must, but this task is proven to be easier for mobile apps than for desktop games and other multi-device content. The greatest challenges in Japan are promotion and monetization, but there are specialized partners working in these regions that, even with very minimal or zero investment, can support app developers in the process of claiming their spot under the Eastern sun.
Ultimately, Asia is a huge market in several ways: it has an impressive number of users, the rate of smartphone penetration is growing exponentially, the average time spent on portable devices by users is very high, and those in APAC are also used to making mobile-based purchases.
On the other hand, we are talking about a very fragmented market that requires every mobile content provider to be well prepared, with a mind to explore different publishing options that will vary greatly by target segment or country. The important thing to remember when tackling the APAC region is to differentiate and not put all your eggs in one basket. The revenue potential is real and it’s growing every day – it’s now a matter of who will be the first to capitalize on this and transform the Asian opportunity into a success story.
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